Correlation Between Federated Government and Catalystmap Global

Can any of the company-specific risk be diversified away by investing in both Federated Government and Catalystmap Global at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Federated Government and Catalystmap Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Federated Government Income and Catalystmap Global Balanced, you can compare the effects of market volatilities on Federated Government and Catalystmap Global and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Federated Government with a short position of Catalystmap Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Government and Catalystmap Global.

Diversification Opportunities for Federated Government and Catalystmap Global

0.52

Correlation Coefficient

Federated Government  Catalystmap Global

Very weak diversification

The 3 months correlation between Federated and Catalystmap is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Federated Government Income and Catalystmap Global Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmap Global and Federated Government is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Federated Government Income are associated (or correlated) with Catalystmap Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmap Global has no effect on the direction of Federated Government i.e., Federated Government and Catalystmap Global go up and down completely randomly.

Pair Corralation between Federated Government and Catalystmap Global

Assuming the 90 days horizon Federated Government is expected to generate 6.06 times less return on investment than Catalystmap Global. In addition to that, Federated Government is 1.24 times more volatile than Catalystmap Global Balanced. It trades about 0.03 of its total potential returns per unit of risk. Catalystmap Global Balanced is currently generating about 0.25 per unit of volatility. If you would invest  1,173  in Catalystmap Global Balanced on May 2, 2025 and sell it today you would earn a total of  52.00  from holding Catalystmap Global Balanced or generate 4.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Federated Government Income  vs.  Catalystmap Global Balanced

Federated Government

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Government Income are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Federated Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystmap Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmap Global Balanced are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Catalystmap Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Federated Government and Catalystmap Global

The main advantage of trading using opposite Federated Government and Catalystmap Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Government position performs unexpectedly, Catalystmap Global can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Catalystmap Global will offset losses from the drop in Catalystmap Global's long position.

The idea behind Federated Government Income and Catalystmap Global Balanced pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.