Correlation Between Federated Mid-cap and Matson Money

Can any of the company-specific risk be diversified away by investing in both Federated Mid-cap and Matson Money 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 Mid-cap and Matson Money into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Federated Mid Cap Index and Matson Money Equity, you can compare the effects of market volatilities on Federated Mid-cap and Matson Money 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 Mid-cap with a short position of Matson Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mid-cap and Matson Money.

Diversification Opportunities for Federated Mid-cap and Matson Money

0.96

Correlation Coefficient

Federated Mid-cap  Matson Money

Almost no diversification

The 3 months correlation between Federated and Matson is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mid Cap Index and Matson Money Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matson Money Equity and Federated Mid-cap 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 Mid Cap Index are associated (or correlated) with Matson Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matson Money Equity has no effect on the direction of Federated Mid-cap i.e., Federated Mid-cap and Matson Money go up and down completely randomly.

Pair Corralation between Federated Mid-cap and Matson Money

Assuming the 90 days horizon Federated Mid Cap Index is expected to generate 0.95 times more return on investment than Matson Money. However, Federated Mid Cap Index is 1.05 times less risky than Matson Money. It trades about 0.05 of its potential returns per unit of risk. Matson Money Equity is currently generating about 0.02 per unit of risk. If you would invest  1,267  in Federated Mid Cap Index on July 26, 2025 and sell it today you would earn a total of  366.00  from holding Federated Mid Cap Index or generate 28.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.79%
Values	Daily Returns

Federated Mid Cap Index  vs.  Matson Money Equity

Federated Mid Cap

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Mid Cap Index are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Federated Mid-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Matson Money Equity

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Matson Money Equity are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Matson Money 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 Mid-cap and Matson Money

The main advantage of trading using opposite Federated Mid-cap and Matson Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mid-cap position performs unexpectedly, Matson Money 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 Matson Money will offset losses from the drop in Matson Money's long position.

The idea behind Federated Mid Cap Index and Matson Money Equity 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.