Correlation Between Federated Premier and Prime Meridian
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Prime Meridian 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 Prime Meridian 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 Prime Meridian Holding, you can compare the effects of market volatilities on Federated Premier and Prime Meridian 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 Prime Meridian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Prime Meridian.
Diversification Opportunities for Federated Premier and Prime Meridian
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Prime is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Prime Meridian Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Meridian Holding 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 Prime Meridian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Meridian Holding has no effect on the direction of Federated Premier i.e., Federated Premier and Prime Meridian go up and down completely randomly.
Pair Corralation between Federated Premier and Prime Meridian
Considering the 90-day investment horizon Federated Premier is expected to generate 20.53 times less return on investment than Prime Meridian. But when comparing it to its historical volatility, Federated Premier Municipal is 2.46 times less risky than Prime Meridian. It trades about 0.02 of its potential returns per unit of risk. Prime Meridian Holding is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,267 in Prime Meridian Holding on August 25, 2024 and sell it today you would earn a total of 632.00 from holding Prime Meridian Holding or generate 27.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Prime Meridian Holding
Performance |
| Timeline |
| Federated Premier |
| Prime Meridian Holding |
Federated Premier and Prime Meridian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Prime Meridian
The main advantage of trading using opposite Federated Premier and Prime Meridian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Prime Meridian 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 Prime Meridian will offset losses from the drop in Prime Meridian's 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 |
| Prime Meridian vs. Invesco High Income | Prime Meridian vs. Blackrock Muniholdings Ny | Prime Meridian vs. MFS Investment Grade | Prime Meridian vs. Federated Premier Municipal |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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