Correlation Between Federated Premier and Carlyle
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Carlyle 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 Carlyle 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 Carlyle Group, you can compare the effects of market volatilities on Federated Premier and Carlyle 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 Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Carlyle.
Diversification Opportunities for Federated Premier and Carlyle
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Carlyle is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle 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 Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Federated Premier i.e., Federated Premier and Carlyle go up and down completely randomly.
Pair Corralation between Federated Premier and Carlyle
Considering the 90-day investment horizon Federated Premier Municipal is expected to under-perform the Carlyle. But the fund apears to be less risky and, when comparing its historical volatility, Federated Premier Municipal is 3.26 times less risky than Carlyle. The fund trades about -0.14 of its potential returns per unit of risk. The Carlyle Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,822 in Carlyle Group on September 3, 2024 and sell it today you would earn a total of 1,501 from holding Carlyle Group or generate 39.27% 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. Carlyle Group
Performance |
| Timeline |
| Federated Premier |
| Carlyle Group |
Federated Premier and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Carlyle
The main advantage of trading using opposite Federated Premier and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Carlyle 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 Carlyle will offset losses from the drop in Carlyle's long position.| Federated Premier vs. Tekla Healthcare Investors | Federated Premier vs. Tekla Life Sciences | Federated Premier vs. Cohen Steers Reit | Federated Premier vs. XAI Octagon Floating |
| Carlyle vs. Federated Premier Municipal | Carlyle vs. Blackrock Muniyield | Carlyle vs. Diamond Hill Investment | Carlyle vs. Federated Investors B |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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