Correlation Between Federated Premier and Aeon Ventures
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Aeon Ventures 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 Aeon Ventures 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 Aeon Ventures, you can compare the effects of market volatilities on Federated Premier and Aeon Ventures 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 Aeon Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Aeon Ventures.
Diversification Opportunities for Federated Premier and Aeon Ventures
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Aeon is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Aeon Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Ventures 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 Aeon Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Ventures has no effect on the direction of Federated Premier i.e., Federated Premier and Aeon Ventures go up and down completely randomly.
Pair Corralation between Federated Premier and Aeon Ventures
Considering the 90-day investment horizon Federated Premier is expected to generate 11.58 times less return on investment than Aeon Ventures. But when comparing it to its historical volatility, Federated Premier Municipal is 22.32 times less risky than Aeon Ventures. It trades about 0.07 of its potential returns per unit of risk. Aeon Ventures is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2.40 in Aeon Ventures on August 26, 2024 and sell it today you would lose (0.91) from holding Aeon Ventures or give up 37.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Aeon Ventures
Performance |
| Timeline |
| Federated Premier |
| Aeon Ventures |
Federated Premier and Aeon Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Aeon Ventures
The main advantage of trading using opposite Federated Premier and Aeon Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Aeon Ventures 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 Aeon Ventures will offset losses from the drop in Aeon Ventures' 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 |
| Aeon Ventures vs. Invesco High Income | Aeon Ventures vs. Blackrock Muniholdings Ny | Aeon Ventures vs. MFS Investment Grade | Aeon Ventures 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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