Correlation Between Federated Premier and BlackRock Utility
Can any of the company-specific risk be diversified away by investing in both Federated Premier and BlackRock Utility 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 Utility 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 Utility Infrastructure, you can compare the effects of market volatilities on Federated Premier and BlackRock Utility 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 Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and BlackRock Utility.
Diversification Opportunities for Federated Premier and BlackRock Utility
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and BlackRock is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and BlackRock Utility Infrastructu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Utility 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 Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Utility has no effect on the direction of Federated Premier i.e., Federated Premier and BlackRock Utility go up and down completely randomly.
Pair Corralation between Federated Premier and BlackRock Utility
Considering the 90-day investment horizon Federated Premier Municipal is expected to under-perform the BlackRock Utility. But the fund apears to be less risky and, when comparing its historical volatility, Federated Premier Municipal is 1.05 times less risky than BlackRock Utility. The fund trades about -0.1 of its potential returns per unit of risk. The BlackRock Utility Infrastructure is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,337 in BlackRock Utility Infrastructure on August 28, 2024 and sell it today you would earn a total of 22.00 from holding BlackRock Utility Infrastructure or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Premier Municipal vs. BlackRock Utility Infrastructu
Performance |
| Timeline |
| Federated Premier |
| BlackRock Utility |
Federated Premier and BlackRock Utility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and BlackRock Utility
The main advantage of trading using opposite Federated Premier and BlackRock Utility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, BlackRock Utility 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 Utility will offset losses from the drop in BlackRock Utility's long position.| Federated Premier vs. DTF Tax Free | Federated Premier vs. MFS High Yield | Federated Premier vs. MFS High Income | Federated Premier vs. John Hancock Income |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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