Correlation Between Federated Mdt and Vanguard Explorer

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

Diversification Opportunities for Federated Mdt and Vanguard Explorer

1.0
  Correlation Coefficient

No risk reduction

The 3 months correlation between Federated and Vanguard is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Small and Vanguard Explorer Fd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Explorer 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 Vanguard Explorer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Explorer has no effect on the direction of Federated Mdt i.e., Federated Mdt and Vanguard Explorer go up and down completely randomly.

Pair Corralation between Federated Mdt and Vanguard Explorer

Assuming the 90 days horizon Federated Mdt Small is expected to generate 2.04 times more return on investment than Vanguard Explorer. However, Federated Mdt is 2.04 times more volatile than Vanguard Explorer Fd. It trades about -0.02 of its potential returns per unit of risk. Vanguard Explorer Fd is currently generating about -0.05 per unit of risk. If you would invest  2,484  in Federated Mdt Small on April 2, 2022 and sell it today you would lose (589.00)  from holding Federated Mdt Small or give up 23.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Federated Mdt Small  vs.  Vanguard Explorer Fd

 Performance (%) 
      Timeline 
Federated Mdt Small 
Federated Performance
0 of 100
Over the last 90 days Federated Mdt Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the fund investors.

Federated Price Channel

Vanguard Explorer 
Vanguard Performance
0 of 100
Over the last 90 days Vanguard Explorer Fd has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the fund investors.

Vanguard Price Channel

Federated Mdt and Vanguard Explorer Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Federated Mdt and Vanguard Explorer

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

Federated Mdt Small

Pair trading matchups for Federated Mdt

The idea behind Federated Mdt Small and Vanguard Explorer Fd 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.

Vanguard Explorer Fd

Pair trading matchups for Vanguard Explorer

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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