Correlation Between Federated Premier and Barings Participation
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Barings Participation 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 Barings Participation 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 Barings Participation Investors, you can compare the effects of market volatilities on Federated Premier and Barings Participation 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 Barings Participation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Barings Participation.
Diversification Opportunities for Federated Premier and Barings Participation
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federated and Barings is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Barings Participation Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Participation 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 Barings Participation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Participation has no effect on the direction of Federated Premier i.e., Federated Premier and Barings Participation go up and down completely randomly.
Pair Corralation between Federated Premier and Barings Participation
Considering the 90-day investment horizon Federated Premier is expected to generate 3.96 times less return on investment than Barings Participation. But when comparing it to its historical volatility, Federated Premier Municipal is 2.29 times less risky than Barings Participation. It trades about 0.04 of its potential returns per unit of risk. Barings Participation Investors is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,054 in Barings Participation Investors on August 28, 2024 and sell it today you would earn a total of 594.00 from holding Barings Participation Investors or generate 56.36% 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. Barings Participation Investor
Performance |
| Timeline |
| Federated Premier |
| Barings Participation |
Federated Premier and Barings Participation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Barings Participation
The main advantage of trading using opposite Federated Premier and Barings Participation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Barings Participation 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 Barings Participation will offset losses from the drop in Barings Participation'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 |
| Barings Participation vs. Allianzgi Equity Convertible | Barings Participation vs. Cohen Steers Total | Barings Participation vs. Blackrock Floating Rate | Barings Participation vs. MFS Investment Grade |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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