Correlation Between Federated Premier and Saba Capital
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Saba Capital 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 Saba Capital 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 Saba Capital Income, you can compare the effects of market volatilities on Federated Premier and Saba Capital 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 Saba Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Saba Capital.
Diversification Opportunities for Federated Premier and Saba Capital
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Saba is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Saba Capital Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saba Capital Income 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 Saba Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saba Capital Income has no effect on the direction of Federated Premier i.e., Federated Premier and Saba Capital go up and down completely randomly.
Pair Corralation between Federated Premier and Saba Capital
Considering the 90-day investment horizon Federated Premier Municipal is expected to under-perform the Saba Capital. In addition to that, Federated Premier is 1.81 times more volatile than Saba Capital Income. It trades about -0.03 of its total potential returns per unit of risk. Saba Capital Income is currently generating about 0.7 per unit of volatility. If you would invest 742.00 in Saba Capital Income on September 1, 2024 and sell it today you would earn a total of 42.00 from holding Saba Capital Income or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Premier Municipal vs. Saba Capital Income
Performance |
| Timeline |
| Federated Premier |
| Saba Capital Income |
Federated Premier and Saba Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Saba Capital
The main advantage of trading using opposite Federated Premier and Saba Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Saba Capital 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 Saba Capital will offset losses from the drop in Saba Capital'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 |
| Saba Capital vs. Federated Premier Municipal | Saba Capital vs. Blackrock Muniyield | Saba Capital vs. Diamond Hill Investment | Saba Capital vs. NXG NextGen Infrastructure |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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