Correlation Between Federated Short-intermedia and Intermediate Government

Can any of the company-specific risk be diversified away by investing in both Federated Short-intermedia and Intermediate Government 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 Short-intermedia and Intermediate Government into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Federated Short Intermediate Duration and Intermediate Government Bond, you can compare the effects of market volatilities on Federated Short-intermedia and Intermediate Government 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 Short-intermedia with a short position of Intermediate Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Short-intermedia and Intermediate Government.

Diversification Opportunities for Federated Short-intermedia and Intermediate Government

0.9

Correlation Coefficient

Federated Short-intermedia  Intermediate Government

Almost no diversification

The 3 months correlation between Federated and Intermediate is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Federated Short Intermediate D and Intermediate Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Government and Federated Short-intermedia 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 Short Intermediate Duration are associated (or correlated) with Intermediate Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Government has no effect on the direction of Federated Short-intermedia i.e., Federated Short-intermedia and Intermediate Government go up and down completely randomly.

Pair Corralation between Federated Short-intermedia and Intermediate Government

Assuming the 90 days horizon Federated Short Intermediate Duration is expected to generate 0.57 times more return on investment than Intermediate Government. However, Federated Short Intermediate Duration is 1.75 times less risky than Intermediate Government. It trades about 0.37 of its potential returns per unit of risk. Intermediate Government Bond is currently generating about 0.15 per unit of risk. If you would invest  988.00  in Federated Short Intermediate Duration on May 11, 2025 and sell it today you would earn a total of  16.00  from holding Federated Short Intermediate Duration or generate 1.62% return on investment over 90 days.

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

Federated Short Intermediate D  vs.  Intermediate Government Bond

Federated Short-intermedia

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Short Intermediate Duration are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Federated Short-intermedia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Intermediate Government

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Government Bond are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Intermediate Government 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 Short-intermedia and Intermediate Government

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

The idea behind Federated Short Intermediate Duration and Intermediate Government Bond 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.