Correlation Between Federated Premier and Coastal Carolina
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Coastal Carolina 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 Coastal Carolina 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 Coastal Carolina Bancshares, you can compare the effects of market volatilities on Federated Premier and Coastal Carolina 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 Coastal Carolina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Coastal Carolina.
Diversification Opportunities for Federated Premier and Coastal Carolina
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Coastal is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Coastal Carolina Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Carolina Ban 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 Coastal Carolina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Carolina Ban has no effect on the direction of Federated Premier i.e., Federated Premier and Coastal Carolina go up and down completely randomly.
Pair Corralation between Federated Premier and Coastal Carolina
Considering the 90-day investment horizon Federated Premier Municipal is expected to under-perform the Coastal Carolina. But the fund apears to be less risky and, when comparing its historical volatility, Federated Premier Municipal is 1.83 times less risky than Coastal Carolina. The fund trades about -0.06 of its potential returns per unit of risk. The Coastal Carolina Bancshares is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in Coastal Carolina Bancshares on August 29, 2024 and sell it today you would earn a total of 140.00 from holding Coastal Carolina Bancshares or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Coastal Carolina Bancshares
Performance |
| Timeline |
| Federated Premier |
| Coastal Carolina Ban |
Federated Premier and Coastal Carolina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Coastal Carolina
The main advantage of trading using opposite Federated Premier and Coastal Carolina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Coastal Carolina 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 Coastal Carolina will offset losses from the drop in Coastal Carolina'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 |
| Coastal Carolina vs. Invesco High Income | Coastal Carolina vs. Blackrock Muniholdings Ny | Coastal Carolina vs. MFS Investment Grade | Coastal Carolina vs. Federated Premier Municipal |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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