Correlation Between Federated Premier and Blackrock Muni
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Blackrock Muni 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 Muni 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 Muni Intermediate, you can compare the effects of market volatilities on Federated Premier and Blackrock Muni 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 Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Blackrock Muni.
Diversification Opportunities for Federated Premier and Blackrock Muni
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federated and Blackrock is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Blackrock Muni Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muni Inter 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 Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muni Inter has no effect on the direction of Federated Premier i.e., Federated Premier and Blackrock Muni go up and down completely randomly.
Pair Corralation between Federated Premier and Blackrock Muni
Considering the 90-day investment horizon Federated Premier is expected to generate 1.46 times less return on investment than Blackrock Muni. In addition to that, Federated Premier is 1.08 times more volatile than Blackrock Muni Intermediate. It trades about 0.08 of its total potential returns per unit of risk. Blackrock Muni Intermediate is currently generating about 0.13 per unit of volatility. If you would invest 1,052 in Blackrock Muni Intermediate on August 24, 2024 and sell it today you would earn a total of 201.00 from holding Blackrock Muni Intermediate or generate 19.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Blackrock Muni Intermediate
Performance |
| Timeline |
| Federated Premier |
| Blackrock Muni Inter |
Federated Premier and Blackrock Muni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Blackrock Muni
The main advantage of trading using opposite Federated Premier and Blackrock Muni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Blackrock Muni 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 Muni will offset losses from the drop in Blackrock Muni's long position.| Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance National | Federated Premier vs. Blackrock Muniyield Quality | Federated Premier vs. Munivest Fund |
| Blackrock Muni vs. MFS Investment Grade | Blackrock Muni vs. Eaton Vance National | Blackrock Muni vs. Blackrock Muniyield Quality | Blackrock Muni vs. Munivest Fund |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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