Correlation Between Federated Premier and Blackrock Muniholdings
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Blackrock Muniholdings 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 Blackrock Muniholdings 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 Blackrock Muniholdings Quality, you can compare the effects of market volatilities on Federated Premier and Blackrock Muniholdings 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 Blackrock Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Blackrock Muniholdings.
Diversification Opportunities for Federated Premier and Blackrock Muniholdings
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Blackrock is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Blackrock Muniholdings Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings 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 Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Federated Premier i.e., Federated Premier and Blackrock Muniholdings go up and down completely randomly.
Pair Corralation between Federated Premier and Blackrock Muniholdings
Considering the 90-day investment horizon Federated Premier Municipal is expected to under-perform the Blackrock Muniholdings. In addition to that, Federated Premier is 1.34 times more volatile than Blackrock Muniholdings Quality. It trades about -0.1 of its total potential returns per unit of risk. Blackrock Muniholdings Quality is currently generating about 0.45 per unit of volatility. If you would invest 1,021 in Blackrock Muniholdings Quality on August 28, 2024 and sell it today you would earn a total of 55.00 from holding Blackrock Muniholdings Quality or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Blackrock Muniholdings Quality
Performance |
| Timeline |
| Federated Premier |
| Blackrock Muniholdings |
Federated Premier and Blackrock Muniholdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Blackrock Muniholdings
The main advantage of trading using opposite Federated Premier and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Blackrock Muniholdings 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 Blackrock Muniholdings will offset losses from the drop in Blackrock Muniholdings' 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 |
| Blackrock Muniholdings vs. DTF Tax Free | Blackrock Muniholdings vs. MFS High Yield | Blackrock Muniholdings vs. MFS High Income | Blackrock Muniholdings vs. John Hancock Income |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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