Correlation Between Federated Premier and Gabelli Utility
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Gabelli Utility 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 Gabelli Utility 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 Gabelli Utility Closed, you can compare the effects of market volatilities on Federated Premier and Gabelli Utility 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 Gabelli Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Gabelli Utility.
Diversification Opportunities for Federated Premier and Gabelli Utility
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Gabelli is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Gabelli Utility Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utility Closed 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 Gabelli Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Utility Closed has no effect on the direction of Federated Premier i.e., Federated Premier and Gabelli Utility go up and down completely randomly.
Pair Corralation between Federated Premier and Gabelli Utility
Considering the 90-day investment horizon Federated Premier Municipal is expected to generate 0.41 times more return on investment than Gabelli Utility. However, Federated Premier Municipal is 2.45 times less risky than Gabelli Utility. It trades about 0.03 of its potential returns per unit of risk. Gabelli Utility Closed is currently generating about 0.0 per unit of risk. If you would invest 1,026 in Federated Premier Municipal on November 1, 2024 and sell it today you would earn a total of 78.00 from holding Federated Premier Municipal or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Gabelli Utility Closed
Performance |
| Timeline |
| Federated Premier |
| Gabelli Utility Closed |
Federated Premier and Gabelli Utility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Gabelli Utility
The main advantage of trading using opposite Federated Premier and Gabelli Utility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Gabelli Utility 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 Gabelli Utility will offset losses from the drop in Gabelli Utility's long position.| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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