Correlation Between Blackrock Muniholdings and Federated Premier
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings and Federated Premier 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 Blackrock Muniholdings and Federated Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Muniholdings Quality and Federated Premier Municipal, you can compare the effects of market volatilities on Blackrock Muniholdings and Federated Premier 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 Blackrock Muniholdings with a short position of Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and Federated Premier.
Diversification Opportunities for Blackrock Muniholdings and Federated Premier
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackrock and Federated is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Quality and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier and Blackrock Muniholdings 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 Blackrock Muniholdings Quality are associated (or correlated) with Federated Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Premier has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and Federated Premier go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and Federated Premier
Considering the 90-day investment horizon Blackrock Muniholdings is expected to generate 1.04 times less return on investment than Federated Premier. But when comparing it to its historical volatility, Blackrock Muniholdings Quality is 1.02 times less risky than Federated Premier. It trades about 0.13 of its potential returns per unit of risk. Federated Premier Municipal is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,105 in Federated Premier Municipal on November 18, 2024 and sell it today you would earn a total of 17.00 from holding Federated Premier Municipal or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniholdings Quality vs. Federated Premier Municipal
Performance |
| Timeline |
| Blackrock Muniholdings |
| Federated Premier |
Blackrock Muniholdings and Federated Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and Federated Premier
The main advantage of trading using opposite Blackrock Muniholdings and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings position performs unexpectedly, Federated Premier 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 Federated Premier will offset losses from the drop in Federated Premier's long position.| Blackrock Muniholdings vs. MFS Investment Grade | Blackrock Muniholdings vs. Eaton Vance Municipal | Blackrock Muniholdings vs. DTF Tax Free | Blackrock Muniholdings vs. Aquagold International |
| Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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