Correlation Between Federated Premier and Nuveen High
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Nuveen High 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 Nuveen High 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 Nuveen High Income, you can compare the effects of market volatilities on Federated Premier and Nuveen High 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 Nuveen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Nuveen High.
Diversification Opportunities for Federated Premier and Nuveen High
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Nuveen is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Nuveen High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen High Income 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 Nuveen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen High Income has no effect on the direction of Federated Premier i.e., Federated Premier and Nuveen High go up and down completely randomly.
Pair Corralation between Federated Premier and Nuveen High
If you would invest 939.00 in Nuveen High Income on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Nuveen High Income or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Federated Premier Municipal vs. Nuveen High Income
Performance |
| Timeline |
| Federated Premier |
| Nuveen High Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Federated Premier and Nuveen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Nuveen High
The main advantage of trading using opposite Federated Premier and Nuveen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Nuveen High 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 Nuveen High will offset losses from the drop in Nuveen High's long position.| Federated Premier vs. DTF Tax Free | Federated Premier vs. MFS High Yield | Federated Premier vs. MFS High Income | Federated Premier vs. John Hancock Income |
| Nuveen High vs. MFS Investment Grade | Nuveen High vs. Eaton Vance National | Nuveen High vs. Invesco High Income | Nuveen High vs. Nuveen California Select |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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