Correlation Between Azimut Holding and Federated Premier
Can any of the company-specific risk be diversified away by investing in both Azimut Holding and Federated Premier 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 Azimut Holding and Federated Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azimut Holding SpA and Federated Premier Municipal, you can compare the effects of market volatilities on Azimut Holding and Federated Premier 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 Azimut Holding with a short position of Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azimut Holding and Federated Premier.
Diversification Opportunities for Azimut Holding and Federated Premier
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Azimut and Federated is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Azimut Holding SpA and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier and Azimut Holding 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 Azimut Holding SpA are associated (or correlated) with Federated Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Premier has no effect on the direction of Azimut Holding i.e., Azimut Holding and Federated Premier go up and down completely randomly.
Pair Corralation between Azimut Holding and Federated Premier
Assuming the 90 days horizon Azimut Holding SpA is expected to generate 5.28 times more return on investment than Federated Premier. However, Azimut Holding is 5.28 times more volatile than Federated Premier Municipal. It trades about 0.04 of its potential returns per unit of risk. Federated Premier Municipal is currently generating about 0.05 per unit of risk. If you would invest 2,015 in Azimut Holding SpA on September 1, 2024 and sell it today you would earn a total of 475.00 from holding Azimut Holding SpA or generate 23.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.56% |
| Values | Daily Returns |
Azimut Holding SpA vs. Federated Premier Municipal
Performance |
| Timeline |
| Azimut Holding SpA |
| Federated Premier |
Azimut Holding and Federated Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azimut Holding and Federated Premier
The main advantage of trading using opposite Azimut Holding and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azimut Holding position performs unexpectedly, Federated Premier 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 Premier will offset losses from the drop in Federated Premier's long position.| Azimut Holding vs. Starfleet Innotech | Azimut Holding vs. Flow Capital Corp | Azimut Holding vs. Ameritrans Capital Corp | Azimut Holding vs. Blackhawk Growth Corp |
| Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free | Federated Premier vs. Aquagold International |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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