Correlation Between Federated Premier and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Affiliated Managers 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 Affiliated Managers 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 Affiliated Managers Group, you can compare the effects of market volatilities on Federated Premier and Affiliated Managers 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 Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Affiliated Managers.
Diversification Opportunities for Federated Premier and Affiliated Managers
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Affiliated is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers 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 Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Federated Premier i.e., Federated Premier and Affiliated Managers go up and down completely randomly.
Pair Corralation between Federated Premier and Affiliated Managers
Considering the 90-day investment horizon Federated Premier Municipal is expected to under-perform the Affiliated Managers. But the fund apears to be less risky and, when comparing its historical volatility, Federated Premier Municipal is 2.35 times less risky than Affiliated Managers. The fund trades about -0.09 of its potential returns per unit of risk. The Affiliated Managers Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 17,120 in Affiliated Managers Group on August 28, 2024 and sell it today you would earn a total of 1,799 from holding Affiliated Managers Group or generate 10.51% 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. Affiliated Managers Group
Performance |
| Timeline |
| Federated Premier |
| Affiliated Managers |
Federated Premier and Affiliated Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Affiliated Managers
The main advantage of trading using opposite Federated Premier and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Affiliated Managers 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 Affiliated Managers will offset losses from the drop in Affiliated Managers' long position.| Federated Premier vs. Dws Strategic Municipal | Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free |
| Affiliated Managers vs. Brightsphere Investment Group | Affiliated Managers vs. Franklin Templeton Limited | Affiliated Managers vs. Blackrock Muni Intermediate | Affiliated Managers vs. Munivest Fund |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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