Correlation Between Federated Premier and Katahdin Bankshares
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Katahdin Bankshares 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 Katahdin Bankshares 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 Katahdin Bankshares Corp, you can compare the effects of market volatilities on Federated Premier and Katahdin Bankshares 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 Katahdin Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Katahdin Bankshares.
Diversification Opportunities for Federated Premier and Katahdin Bankshares
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federated and Katahdin is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Katahdin Bankshares Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katahdin Bankshares Corp 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 Katahdin Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katahdin Bankshares Corp has no effect on the direction of Federated Premier i.e., Federated Premier and Katahdin Bankshares go up and down completely randomly.
Pair Corralation between Federated Premier and Katahdin Bankshares
Considering the 90-day investment horizon Federated Premier is expected to generate 2.41 times less return on investment than Katahdin Bankshares. But when comparing it to its historical volatility, Federated Premier Municipal is 3.34 times less risky than Katahdin Bankshares. It trades about 0.05 of its potential returns per unit of risk. Katahdin Bankshares Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,068 in Katahdin Bankshares Corp on August 31, 2024 and sell it today you would earn a total of 388.00 from holding Katahdin Bankshares Corp or generate 18.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 76.36% |
| Values | Daily Returns |
Federated Premier Municipal vs. Katahdin Bankshares Corp
Performance |
| Timeline |
| Federated Premier |
| Katahdin Bankshares Corp |
Federated Premier and Katahdin Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Katahdin Bankshares
The main advantage of trading using opposite Federated Premier and Katahdin Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Katahdin Bankshares 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 Katahdin Bankshares will offset losses from the drop in Katahdin Bankshares' 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 |
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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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