Correlation Between Federated Mdt and Monthly Rebalance

Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Monthly Rebalance 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 Monthly Rebalance 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 Monthly Rebalance Nasdaq 100, you can compare the effects of market volatilities on Federated Mdt and Monthly Rebalance 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 Monthly Rebalance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Monthly Rebalance.

Diversification Opportunities for Federated Mdt and Monthly Rebalance

0.58

Correlation Coefficient

Federated Mdt  Monthly Rebalance

Very weak diversification

The 3 months correlation between Federated and Monthly is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Small and Monthly Rebalance Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monthly Rebalance 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 Monthly Rebalance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monthly Rebalance has no effect on the direction of Federated Mdt i.e., Federated Mdt and Monthly Rebalance go up and down completely randomly.

Pair Corralation between Federated Mdt and Monthly Rebalance

Assuming the 90 days horizon Federated Mdt is expected to generate 1.14 times less return on investment than Monthly Rebalance. But when comparing it to its historical volatility, Federated Mdt Small is 1.22 times less risky than Monthly Rebalance. It trades about 0.18 of its potential returns per unit of risk. Monthly Rebalance Nasdaq 100 is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  57,005  in Monthly Rebalance Nasdaq 100 on June 28, 2025 and sell it today you would earn a total of  8,633  from holding Monthly Rebalance Nasdaq 100 or generate 15.14% 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.  Monthly Rebalance Nasdaq 100

Federated Mdt Small

Risk-Adjusted Performance

Good

Over the last 90 days Federated Mdt Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak technical and fundamental indicators, Federated Mdt showed solid returns over the last few months and may actually be approaching a breakup point.

Monthly Rebalance

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monthly Rebalance Nasdaq 100 are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Monthly Rebalance showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Federated Mdt and Monthly Rebalance

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

The idea behind Federated Mdt Small and Monthly Rebalance Nasdaq 100 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.