Correlation Between Federated Max-cap and All Asset

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

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

Diversification Opportunities for Federated Max-cap and All Asset

0.93

Correlation Coefficient

Federated Max-cap  All Asset

Almost no diversification

The 3 months correlation between Federated and All is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Federated Max Cap Index and All Asset Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All Asset Fund and Federated Max-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 Max Cap Index are associated (or correlated) with All Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All Asset Fund has no effect on the direction of Federated Max-cap i.e., Federated Max-cap and All Asset go up and down completely randomly.

Pair Corralation between Federated Max-cap and All Asset

Assuming the 90 days horizon Federated Max Cap Index is expected to generate 1.87 times more return on investment than All Asset. However, Federated Max-cap is 1.87 times more volatile than All Asset Fund. It trades about 0.2 of its potential returns per unit of risk. All Asset Fund is currently generating about 0.15 per unit of risk. If you would invest  760.00  in Federated Max Cap Index on May 18, 2025 and sell it today you would earn a total of  63.00  from holding Federated Max Cap Index or generate 8.29% return on investment over 90 days.

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

Federated Max Cap Index  vs.  All Asset Fund

Federated Max Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Max Cap Index are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Federated Max-cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

All Asset Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in All Asset Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, All Asset 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 Max-cap and All Asset

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

The idea behind Federated Max Cap Index and All Asset Fund 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.