Correlation Between Cb Large and Federated

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

By analyzing existing cross correlation between Cb Large Cap and Federated U S, you can compare the effects of market volatilities on Cb Large and Federated 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 Cb Large with a short position of Federated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cb Large and Federated.

Diversification Opportunities for Cb Large and Federated

-0.78

Correlation Coefficient

Cb Large  Federated

Pay attention - limited upside

The 3 months correlation between CBLSX and Federated is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cb Large Cap and Federated U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated U S and Cb Large 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 Cb Large Cap are associated (or correlated) with Federated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated U S has no effect on the direction of Cb Large i.e., Cb Large and Federated go up and down completely randomly.

Pair Corralation between Cb Large and Federated

Assuming the 90 days horizon Cb Large Cap is expected to under-perform the Federated. In addition to that, Cb Large is 13.98 times more volatile than Federated U S. It trades about -0.03 of its total potential returns per unit of risk. Federated U S is currently generating about 0.15 per unit of volatility. If you would invest  919.00  in Federated U S on February 5, 2025 and sell it today you would earn a total of  46.00  from holding Federated U S or generate 5.01% return on investment over 90 days.

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

Cb Large Cap  vs.  Federated U S

Cb Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cb Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Cb Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Federated U S

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Federated U S are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Federated is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cb Large and Federated

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

The idea behind Cb Large Cap and Federated U S 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.