Correlation Between Saba Capital and Federated Premier
Can any of the company-specific risk be diversified away by investing in both Saba Capital 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 Saba Capital and Federated Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saba Capital Income and Federated Premier Municipal, you can compare the effects of market volatilities on Saba Capital 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 Saba Capital with a short position of Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saba Capital and Federated Premier.
Diversification Opportunities for Saba Capital and Federated Premier
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Saba and Federated is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Saba Capital Income and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier and Saba Capital 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 Saba Capital Income 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 Saba Capital i.e., Saba Capital and Federated Premier go up and down completely randomly.
Pair Corralation between Saba Capital and Federated Premier
Considering the 90-day investment horizon Saba Capital Income is expected to generate 1.18 times more return on investment than Federated Premier. However, Saba Capital is 1.18 times more volatile than Federated Premier Municipal. It trades about 0.07 of its potential returns per unit of risk. Federated Premier Municipal is currently generating about 0.03 per unit of risk. If you would invest 623.00 in Saba Capital Income on November 2, 2024 and sell it today you would earn a total of 163.00 from holding Saba Capital Income or generate 26.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saba Capital Income vs. Federated Premier Municipal
Performance |
| Timeline |
| Saba Capital Income |
| Federated Premier |
Saba Capital and Federated Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saba Capital and Federated Premier
The main advantage of trading using opposite Saba Capital and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saba Capital 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.| Saba Capital vs. Federated Premier Municipal | Saba Capital vs. Blackrock Muniyield | Saba Capital vs. Diamond Hill Investment | Saba Capital vs. NXG NextGen Infrastructure |
| Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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