Correlation Between Federated Mdt and United Kingdom

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

By analyzing existing cross correlation between Federated Mdt Small and United Kingdom Small, you can compare the effects of market volatilities on Federated Mdt and United Kingdom 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 Mdt with a short position of United Kingdom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and United Kingdom.

Diversification Opportunities for Federated Mdt and United Kingdom

0.88

Correlation Coefficient

Federated Mdt  United Kingdom

Very poor diversification

The 3 months correlation between FEDERATED and United is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Small and United Kingdom Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Kingdom Small and Federated Mdt 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 Mdt Small are associated (or correlated) with United Kingdom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Kingdom Small has no effect on the direction of Federated Mdt i.e., Federated Mdt and United Kingdom go up and down completely randomly.

Pair Corralation between Federated Mdt and United Kingdom

Assuming the 90 days horizon Federated Mdt Small is expected to generate 1.37 times more return on investment than United Kingdom. However, Federated Mdt is 1.37 times more volatile than United Kingdom Small. It trades about 0.2 of its potential returns per unit of risk. United Kingdom Small is currently generating about 0.21 per unit of risk. If you would invest  2,388  in Federated Mdt Small on May 1, 2025 and sell it today you would earn a total of  366.00  from holding Federated Mdt Small or generate 15.33% return on investment over 90 days.

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

Federated Mdt Small  vs.  United Kingdom Small

Federated Mdt Small

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Mdt Small are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Federated Mdt showed solid returns over the last few months and may actually be approaching a breakup point.

United Kingdom Small

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United Kingdom Small are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, United Kingdom may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Federated Mdt and United Kingdom

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

The idea behind Federated Mdt Small and United Kingdom Small 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.