Correlation Between Federated Premier and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Pekin Life 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 Pekin Life 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 Pekin Life Insurance, you can compare the effects of market volatilities on Federated Premier and Pekin Life 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 Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Pekin Life.
Diversification Opportunities for Federated Premier and Pekin Life
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Pekin is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Pekin Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pekin Life Insurance 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 Pekin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pekin Life Insurance has no effect on the direction of Federated Premier i.e., Federated Premier and Pekin Life go up and down completely randomly.
Pair Corralation between Federated Premier and Pekin Life
Considering the 90-day investment horizon Federated Premier is expected to generate 1.56 times less return on investment than Pekin Life. In addition to that, Federated Premier is 1.67 times more volatile than Pekin Life Insurance. It trades about 0.09 of its total potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.23 per unit of volatility. If you would invest 1,150 in Pekin Life Insurance on August 30, 2024 and sell it today you would earn a total of 25.00 from holding Pekin Life Insurance or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Pekin Life Insurance
Performance |
| Timeline |
| Federated Premier |
| Pekin Life Insurance |
Federated Premier and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Pekin Life
The main advantage of trading using opposite Federated Premier and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Pekin Life 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 Pekin Life will offset losses from the drop in Pekin Life's long position.| Federated Premier vs. John Hancock Income | Federated Premier vs. MFS High Income | Federated Premier vs. MFS Investment Grade | Federated Premier vs. Blackrock Muniholdings Closed |
| Pekin Life vs. Invesco High Income | Pekin Life vs. Blackrock Muniholdings Ny | Pekin Life vs. Nuveen California Select | Pekin Life 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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