Correlation Between Ultra-short Fixed and Federated Premier
Can any of the company-specific risk be diversified away by investing in both Ultra-short Fixed 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 Ultra-short Fixed and Federated Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Short Fixed Income and Federated Premier Municipal, you can compare the effects of market volatilities on Ultra-short Fixed 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 Ultra-short Fixed with a short position of Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra-short Fixed and Federated Premier.
Diversification Opportunities for Ultra-short Fixed and Federated Premier
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ultra-short and Federated is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Short Fixed Income and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier and Ultra-short Fixed 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 Ultra Short Fixed Income 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 Ultra-short Fixed i.e., Ultra-short Fixed and Federated Premier go up and down completely randomly.
Pair Corralation between Ultra-short Fixed and Federated Premier
Assuming the 90 days horizon Ultra Short Fixed Income is expected to generate 0.14 times more return on investment than Federated Premier. However, Ultra Short Fixed Income is 7.05 times less risky than Federated Premier. It trades about 0.16 of its potential returns per unit of risk. Federated Premier Municipal is currently generating about -0.11 per unit of risk. If you would invest 1,016 in Ultra Short Fixed Income on November 2, 2024 and sell it today you would earn a total of 15.00 from holding Ultra Short Fixed Income or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Short Fixed Income vs. Federated Premier Municipal
Performance |
| Timeline |
| Ultra Short Fixed |
| Federated Premier |
Ultra-short Fixed and Federated Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra-short Fixed and Federated Premier
The main advantage of trading using opposite Ultra-short Fixed and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra-short Fixed 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.| Ultra-short Fixed vs. Asg Global Alternatives | Ultra-short Fixed vs. Rbc Global Opportunities | Ultra-short Fixed vs. Morningstar Global Income | Ultra-short Fixed vs. Ab Global Bond |
| Federated Premier vs. John Hancock Income | Federated Premier vs. MFS High Income | Federated Premier vs. MFS Investment Grade | Federated Premier vs. Blackrock Muniholdings Closed |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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