Correlation Between Federated Pennsylvania and Prudential Short
Can any of the company-specific risk be diversified away by investing in both Federated Pennsylvania and Prudential Short 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 Pennsylvania and Prudential Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Pennsylvania Municipal and Prudential Short Duration, you can compare the effects of market volatilities on Federated Pennsylvania and Prudential Short 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 Pennsylvania with a short position of Prudential Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Pennsylvania and Prudential Short.
Diversification Opportunities for Federated Pennsylvania and Prudential Short
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Prudential is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Federated Pennsylvania Municip and Prudential Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Short Duration and Federated Pennsylvania 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 Pennsylvania Municipal are associated (or correlated) with Prudential Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Short Duration has no effect on the direction of Federated Pennsylvania i.e., Federated Pennsylvania and Prudential Short go up and down completely randomly.
Pair Corralation between Federated Pennsylvania and Prudential Short
Assuming the 90 days horizon Federated Pennsylvania Municipal is expected to generate 1.93 times more return on investment than Prudential Short. However, Federated Pennsylvania is 1.93 times more volatile than Prudential Short Duration. It trades about 0.39 of its potential returns per unit of risk. Prudential Short Duration is currently generating about 0.15 per unit of risk. If you would invest 1,005 in Federated Pennsylvania Municipal on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Federated Pennsylvania Municipal or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Pennsylvania Municip vs. Prudential Short Duration
Performance |
| Timeline |
| Federated Pennsylvania |
| Prudential Short Duration |
Federated Pennsylvania and Prudential Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Pennsylvania and Prudential Short
The main advantage of trading using opposite Federated Pennsylvania and Prudential Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Pennsylvania position performs unexpectedly, Prudential Short 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 Prudential Short will offset losses from the drop in Prudential Short's long position.| Federated Pennsylvania vs. Balanced Fund Investor | Federated Pennsylvania vs. Multimedia Portfolio Multimedia | Federated Pennsylvania vs. T Rowe Price | Federated Pennsylvania vs. L Abbett Fundamental |
| Prudential Short vs. Boston Partners Small | Prudential Short vs. Victory Rs Partners | Prudential Short vs. Omni Small Cap Value | Prudential Short vs. Pace Smallmedium Value |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |