Correlation Between Federated Premier and Quaint Oak
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Quaint Oak 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 Quaint Oak 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 Quaint Oak Bancorp, you can compare the effects of market volatilities on Federated Premier and Quaint Oak 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 Quaint Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Quaint Oak.
Diversification Opportunities for Federated Premier and Quaint Oak
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federated and Quaint is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Quaint Oak Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaint Oak Bancorp 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 Quaint Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaint Oak Bancorp has no effect on the direction of Federated Premier i.e., Federated Premier and Quaint Oak go up and down completely randomly.
Pair Corralation between Federated Premier and Quaint Oak
Considering the 90-day investment horizon Federated Premier Municipal is expected to under-perform the Quaint Oak. In addition to that, Federated Premier is 1.05 times more volatile than Quaint Oak Bancorp. It trades about -0.03 of its total potential returns per unit of risk. Quaint Oak Bancorp is currently generating about 0.03 per unit of volatility. If you would invest 1,100 in Quaint Oak Bancorp on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Quaint Oak Bancorp or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Quaint Oak Bancorp
Performance |
| Timeline |
| Federated Premier |
| Quaint Oak Bancorp |
Federated Premier and Quaint Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Quaint Oak
The main advantage of trading using opposite Federated Premier and Quaint Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Quaint Oak 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 Quaint Oak will offset losses from the drop in Quaint Oak's long position.| Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free | Federated Premier vs. Aquagold International |
| Quaint Oak vs. HUMANA INC | Quaint Oak vs. SCOR PK | Quaint Oak vs. Aquagold International | Quaint Oak vs. Thrivent High Yield |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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