Correlation Between Doubleline Floating and Federated Premier
Can any of the company-specific risk be diversified away by investing in both Doubleline Floating 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 Doubleline Floating and Federated Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doubleline Floating Rate and Federated Premier Municipal, you can compare the effects of market volatilities on Doubleline Floating 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 Doubleline Floating with a short position of Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline Floating and Federated Premier.
Diversification Opportunities for Doubleline Floating and Federated Premier
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Doubleline and Federated is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Floating Rate and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier and Doubleline Floating 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 Doubleline Floating Rate 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 Doubleline Floating i.e., Doubleline Floating and Federated Premier go up and down completely randomly.
Pair Corralation between Doubleline Floating and Federated Premier
Assuming the 90 days horizon Doubleline Floating is expected to generate 3.0 times less return on investment than Federated Premier. But when comparing it to its historical volatility, Doubleline Floating Rate is 8.4 times less risky than Federated Premier. It trades about 0.45 of its potential returns per unit of risk. Federated Premier Municipal is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,091 in Federated Premier Municipal on October 20, 2024 and sell it today you would earn a total of 18.00 from holding Federated Premier Municipal or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doubleline Floating Rate vs. Federated Premier Municipal
Performance |
| Timeline |
| Doubleline Floating Rate |
| Federated Premier |
Doubleline Floating and Federated Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doubleline Floating and Federated Premier
The main advantage of trading using opposite Doubleline Floating and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubleline Floating 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.| Doubleline Floating vs. Lord Abbett Diversified | Doubleline Floating vs. Locorr Market Trend | Doubleline Floating vs. Investec Emerging Markets | Doubleline Floating vs. Inverse Emerging Markets |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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