Correlation Between Federated Premier and BlackRock California
Can any of the company-specific risk be diversified away by investing in both Federated Premier and BlackRock California 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 BlackRock California 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 BlackRock California Municipal, you can compare the effects of market volatilities on Federated Premier and BlackRock California 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 BlackRock California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and BlackRock California.
Diversification Opportunities for Federated Premier and BlackRock California
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and BlackRock is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and BlackRock California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock California 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 BlackRock California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock California has no effect on the direction of Federated Premier i.e., Federated Premier and BlackRock California go up and down completely randomly.
Pair Corralation between Federated Premier and BlackRock California
Considering the 90-day investment horizon Federated Premier Municipal is expected to generate 0.99 times more return on investment than BlackRock California. However, Federated Premier Municipal is 1.01 times less risky than BlackRock California. It trades about 0.15 of its potential returns per unit of risk. BlackRock California Municipal is currently generating about -0.01 per unit of risk. If you would invest 1,130 in Federated Premier Municipal on September 12, 2024 and sell it today you would earn a total of 17.00 from holding Federated Premier Municipal or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. BlackRock California Municipal
Performance |
| Timeline |
| Federated Premier |
| BlackRock California |
Federated Premier and BlackRock California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and BlackRock California
The main advantage of trading using opposite Federated Premier and BlackRock California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, BlackRock California 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 BlackRock California will offset losses from the drop in BlackRock California's long position.| Federated Premier vs. Oxford Lane Capital | Federated Premier vs. Orchid Island Capital | Federated Premier vs. Guggenheim Strategic Opportunities | Federated Premier vs. Stone Harbor Emerging |
| BlackRock California vs. Blackrock Muniyield Quality | BlackRock California vs. Blackrock Muni Intermediate | BlackRock California vs. Nuveen California Amt | BlackRock California 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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