Correlation Between Federated Mdt and International Equity

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

Diversification Opportunities for Federated Mdt and International Equity

0.5

Correlation Coefficient

Federated Mdt  International Equity

Very weak diversification

The 3 months correlation between Federated and International is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Small and International Equity Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equity 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 International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of Federated Mdt i.e., Federated Mdt and International Equity go up and down completely randomly.

Pair Corralation between Federated Mdt and International Equity

Assuming the 90 days horizon Federated Mdt Small is expected to generate 1.66 times more return on investment than International Equity. However, Federated Mdt is 1.66 times more volatile than International Equity Portfolio. It trades about 0.16 of its potential returns per unit of risk. International Equity Portfolio is currently generating about 0.21 per unit of risk. If you would invest  2,565  in Federated Mdt Small on May 18, 2025 and sell it today you would earn a total of  304.00  from holding Federated Mdt Small or generate 11.85% return on investment over 90 days.

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

Federated Mdt Small  vs.  International Equity Portfolio

Federated Mdt Small

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Mdt Small are ranked lower than 12 (%) 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.

International Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in International Equity Portfolio are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, International Equity may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Federated Mdt and International Equity

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

The idea behind Federated Mdt Small and International Equity Portfolio 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.