Correlation Between Federated Premier and Danske Bank
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Danske Bank 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 Danske Bank 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 Danske Bank AS, you can compare the effects of market volatilities on Federated Premier and Danske Bank 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 Danske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Danske Bank.
Diversification Opportunities for Federated Premier and Danske Bank
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federated and Danske is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Danske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Bank AS 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 Danske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Bank AS has no effect on the direction of Federated Premier i.e., Federated Premier and Danske Bank go up and down completely randomly.
Pair Corralation between Federated Premier and Danske Bank
Considering the 90-day investment horizon Federated Premier Municipal is expected to generate 0.41 times more return on investment than Danske Bank. However, Federated Premier Municipal is 2.45 times less risky than Danske Bank. It trades about -0.1 of its potential returns per unit of risk. Danske Bank AS is currently generating about -0.06 per unit of risk. If you would invest 1,130 in Federated Premier Municipal on August 27, 2024 and sell it today you would lose (18.00) from holding Federated Premier Municipal or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Danske Bank AS
Performance |
| Timeline |
| Federated Premier |
| Danske Bank AS |
Federated Premier and Danske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Danske Bank
The main advantage of trading using opposite Federated Premier and Danske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Danske Bank 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 Danske Bank will offset losses from the drop in Danske Bank'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 |
| Danske Bank vs. Invesco High Income | Danske Bank vs. Blackrock Muniholdings Ny | Danske Bank vs. MFS Investment Grade | Danske Bank 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |