Correlation Between First Trust and Federated Premier
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and Federated Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Energy and Federated Premier Municipal, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Federated Premier.
Diversification Opportunities for First Trust and Federated Premier
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Federated is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Energy and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier and First Trust 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 First Trust Energy 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 First Trust i.e., First Trust and Federated Premier go up and down completely randomly.
Pair Corralation between First Trust and Federated Premier
If you would invest 1,087 in Federated Premier Municipal on November 1, 2024 and sell it today you would earn a total of 21.00 from holding Federated Premier Municipal or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
First Trust Energy vs. Federated Premier Municipal
Performance |
| Timeline |
| First Trust Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Federated Premier |
First Trust and Federated Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Federated Premier
The main advantage of trading using opposite First Trust and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.| First Trust vs. Eagle Point Income | First Trust vs. European Equity Closed | First Trust vs. John Hancock Income | First Trust vs. First Trust Intermediate |
| Federated Premier vs. John Hancock Income | Federated Premier vs. MFS High Income | Federated Premier vs. MFS Investment Grade | Federated Premier vs. Blackrock Muniholdings Closed |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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