Correlation Between Federated Premier and Blackstone
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Blackstone 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 Blackstone 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 Blackstone Group, you can compare the effects of market volatilities on Federated Premier and Blackstone 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 Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Blackstone.
Diversification Opportunities for Federated Premier and Blackstone
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Blackstone is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Federated Premier i.e., Federated Premier and Blackstone go up and down completely randomly.
Pair Corralation between Federated Premier and Blackstone
Considering the 90-day investment horizon Federated Premier Municipal is expected to generate 0.27 times more return on investment than Blackstone. However, Federated Premier Municipal is 3.69 times less risky than Blackstone. It trades about 0.12 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.03 per unit of risk. If you would invest 1,095 in Federated Premier Municipal on November 4, 2024 and sell it today you would earn a total of 15.00 from holding Federated Premier Municipal or generate 1.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Federated Premier Municipal vs. Blackstone Group
Performance |
Timeline |
Federated Premier |
Blackstone Group |
Federated Premier and Blackstone Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Premier and Blackstone
The main advantage of trading using opposite Federated Premier and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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