Correlation Between Federated Mdt and Madison Small

Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Madison Small 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 Madison Small 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 Madison Small Cap, you can compare the effects of market volatilities on Federated Mdt and Madison Small 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 Madison Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Madison Small.

Diversification Opportunities for Federated Mdt and Madison Small

0.0

Correlation Coefficient

Federated Mdt  Madison Small

Pay attention - limited upside

The 3 months correlation between Federated and Madison is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Small and Madison Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Small Cap 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 Madison Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Small Cap has no effect on the direction of Federated Mdt i.e., Federated Mdt and Madison Small go up and down completely randomly.

Pair Corralation between Federated Mdt and Madison Small

If you would invest  2,423  in Federated Mdt Small on May 7, 2025 and sell it today you would earn a total of  248.00  from holding Federated Mdt Small or generate 10.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Federated Mdt Small  vs.  Madison Small Cap

Federated Mdt Small

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Mdt Small are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Federated Mdt may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Madison Small Cap

Risk-Adjusted Performance

Weak

Over the last 90 days Madison Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Madison Small 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 Mdt and Madison Small

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

The idea behind Federated Mdt Small and Madison Small Cap 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.