Correlation Between Federated Premier and Commercial National
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Commercial National 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 Commercial National 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 Commercial National Financial, you can compare the effects of market volatilities on Federated Premier and Commercial National 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 Commercial National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Commercial National.
Diversification Opportunities for Federated Premier and Commercial National
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Commercial is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Commercial National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial National 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 Commercial National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial National has no effect on the direction of Federated Premier i.e., Federated Premier and Commercial National go up and down completely randomly.
Pair Corralation between Federated Premier and Commercial National
Considering the 90-day investment horizon Federated Premier Municipal is expected to under-perform the Commercial National. But the fund apears to be less risky and, when comparing its historical volatility, Federated Premier Municipal is 1.81 times less risky than Commercial National. The fund trades about -0.14 of its potential returns per unit of risk. The Commercial National Financial is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 950.00 in Commercial National Financial on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Commercial National Financial or generate 0.0% 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. Commercial National Financial
Performance |
| Timeline |
| Federated Premier |
| Commercial National |
Federated Premier and Commercial National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Commercial National
The main advantage of trading using opposite Federated Premier and Commercial National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Commercial National 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 Commercial National will offset losses from the drop in Commercial National's long position.| Federated Premier vs. Dws Strategic Municipal | Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free |
| Commercial National vs. Invesco High Income | Commercial National vs. Blackrock Muniholdings Ny | Commercial National vs. MFS Investment Grade | Commercial National 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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