Correlation Between Federated Premier and Carlyle Secured
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Carlyle Secured 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 Secured 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 Secured Lending, you can compare the effects of market volatilities on Federated Premier and Carlyle Secured 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 Secured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Carlyle Secured.
Diversification Opportunities for Federated Premier and Carlyle Secured
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Federated and Carlyle is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Carlyle Secured Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Secured Lending 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 Secured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Secured Lending has no effect on the direction of Federated Premier i.e., Federated Premier and Carlyle Secured go up and down completely randomly.
Pair Corralation between Federated Premier and Carlyle Secured
Considering the 90-day investment horizon Federated Premier is expected to generate 4.71 times less return on investment than Carlyle Secured. But when comparing it to its historical volatility, Federated Premier Municipal is 1.81 times less risky than Carlyle Secured. It trades about 0.03 of its potential returns per unit of risk. Carlyle Secured Lending is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,115 in Carlyle Secured Lending on August 28, 2024 and sell it today you would earn a total of 585.00 from holding Carlyle Secured Lending or generate 52.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Carlyle Secured Lending
Performance |
| Timeline |
| Federated Premier |
| Carlyle Secured Lending |
Federated Premier and Carlyle Secured Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Carlyle Secured
The main advantage of trading using opposite Federated Premier and Carlyle Secured positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Carlyle Secured 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 Secured will offset losses from the drop in Carlyle Secured'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 |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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