Correlation Between Federated Prudent and Comstock Capital
Can any of the company-specific risk be diversified away by investing in both Federated Prudent and Comstock Capital 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 Prudent and Comstock Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Prudent Bear and Comstock Capital Value, you can compare the effects of market volatilities on Federated Prudent and Comstock Capital 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 Prudent with a short position of Comstock Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Prudent and Comstock Capital.
Diversification Opportunities for Federated Prudent and Comstock Capital
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federated and Comstock is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Federated Prudent Bear and Comstock Capital Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Capital Value and Federated Prudent 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 Prudent Bear are associated (or correlated) with Comstock Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Capital Value has no effect on the direction of Federated Prudent i.e., Federated Prudent and Comstock Capital go up and down completely randomly.
Pair Corralation between Federated Prudent and Comstock Capital
Assuming the 90 days horizon Federated Prudent Bear is expected to generate 2.56 times more return on investment than Comstock Capital. However, Federated Prudent is 2.56 times more volatile than Comstock Capital Value. It trades about 0.19 of its potential returns per unit of risk. Comstock Capital Value is currently generating about -0.16 per unit of risk. If you would invest 566.00 in Federated Prudent Bear on January 26, 2024 and sell it today you would earn a total of 18.00 from holding Federated Prudent Bear or generate 3.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Federated Prudent Bear vs. Comstock Capital Value
Performance |
Timeline |
Federated Prudent Bear |
Comstock Capital Value |
Federated Prudent and Comstock Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Prudent and Comstock Capital
The main advantage of trading using opposite Federated Prudent and Comstock Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Prudent position performs unexpectedly, Comstock Capital 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 Comstock Capital will offset losses from the drop in Comstock Capital's long position.Federated Prudent vs. World Energy Fund | Federated Prudent vs. Oil Gas Ultrasector | Federated Prudent vs. Energy Basic Materials | Federated Prudent vs. Tortoise Energy Independence |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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