Correlation Between Federated Premier and Guardian Capital
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Guardian Capital 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 Guardian Capital 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 Guardian Capital Group, you can compare the effects of market volatilities on Federated Premier and Guardian Capital 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 Guardian Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Guardian Capital.
Diversification Opportunities for Federated Premier and Guardian Capital
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Guardian is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Guardian Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Capital 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 Guardian Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Capital has no effect on the direction of Federated Premier i.e., Federated Premier and Guardian Capital go up and down completely randomly.
Pair Corralation between Federated Premier and Guardian Capital
Considering the 90-day investment horizon Federated Premier is expected to generate 4.36 times less return on investment than Guardian Capital. In addition to that, Federated Premier is 1.29 times more volatile than Guardian Capital Group. It trades about 0.02 of its total potential returns per unit of risk. Guardian Capital Group is currently generating about 0.12 per unit of volatility. If you would invest 2,881 in Guardian Capital Group on August 31, 2024 and sell it today you would earn a total of 39.00 from holding Guardian Capital Group or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Guardian Capital Group
Performance |
| Timeline |
| Federated Premier |
| Guardian Capital |
Federated Premier and Guardian Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Guardian Capital
The main advantage of trading using opposite Federated Premier and Guardian Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Guardian Capital 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 Guardian Capital will offset losses from the drop in Guardian Capital's long position.| Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free | Federated Premier vs. HUMANA INC |
| Guardian Capital vs. Flow Capital Corp | Guardian Capital vs. Blackhawk Growth Corp | Guardian Capital vs. Urbana | Guardian Capital vs. Princeton Capital |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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