Correlation Between Federated Premier and Aberdeen International
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Aberdeen International 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 Premier and Aberdeen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Premier Municipal and Aberdeen International, you can compare the effects of market volatilities on Federated Premier and Aberdeen International 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 Premier with a short position of Aberdeen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Aberdeen International.
Diversification Opportunities for Federated Premier and Aberdeen International
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Aberdeen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Aberdeen International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen International and Federated Premier 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 Premier Municipal are associated (or correlated) with Aberdeen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen International has no effect on the direction of Federated Premier i.e., Federated Premier and Aberdeen International go up and down completely randomly.
Pair Corralation between Federated Premier and Aberdeen International
Considering the 90-day investment horizon Federated Premier Municipal is expected to under-perform the Aberdeen International. But the fund apears to be less risky and, when comparing its historical volatility, Federated Premier Municipal is 14.26 times less risky than Aberdeen International. The fund trades about -0.03 of its potential returns per unit of risk. The Aberdeen International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Aberdeen International on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Aberdeen International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Aberdeen International
Performance |
| Timeline |
| Federated Premier |
| Aberdeen International |
Federated Premier and Aberdeen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Aberdeen International
The main advantage of trading using opposite Federated Premier and Aberdeen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Aberdeen International 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 Aberdeen International will offset losses from the drop in Aberdeen International's long position.| Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free | Federated Premier vs. Aquagold International |
| Aberdeen International vs. HUMANA INC | Aberdeen International vs. SCOR PK | Aberdeen International vs. Aquagold International | Aberdeen International vs. Thrivent High Yield |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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