Correlation Between Maryland Tax-free and Federated High
Can any of the company-specific risk be diversified away by investing in both Maryland Tax-free and Federated High 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 Maryland Tax-free and Federated High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maryland Tax Free Bond and Federated High Yield, you can compare the effects of market volatilities on Maryland Tax-free and Federated High 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 Maryland Tax-free with a short position of Federated High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maryland Tax-free and Federated High.
Diversification Opportunities for Maryland Tax-free and Federated High
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Maryland and Federated is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Maryland Tax Free Bond and Federated High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated High Yield and Maryland Tax-free 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 Maryland Tax Free Bond are associated (or correlated) with Federated High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated High Yield has no effect on the direction of Maryland Tax-free i.e., Maryland Tax-free and Federated High go up and down completely randomly.
Pair Corralation between Maryland Tax-free and Federated High
Assuming the 90 days horizon Maryland Tax-free is expected to generate 1.59 times less return on investment than Federated High. In addition to that, Maryland Tax-free is 1.03 times more volatile than Federated High Yield. It trades about 0.1 of its total potential returns per unit of risk. Federated High Yield is currently generating about 0.16 per unit of volatility. If you would invest 586.00 in Federated High Yield on November 3, 2024 and sell it today you would earn a total of 55.00 from holding Federated High Yield or generate 9.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maryland Tax Free Bond vs. Federated High Yield
Performance |
| Timeline |
| Maryland Tax Free |
| Federated High Yield |
Maryland Tax-free and Federated High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maryland Tax-free and Federated High
The main advantage of trading using opposite Maryland Tax-free and Federated High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maryland Tax-free position performs unexpectedly, Federated High 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 High will offset losses from the drop in Federated High's long position.| Maryland Tax-free vs. Dreyfusstandish Global Fixed | Maryland Tax-free vs. Rbc Bluebay Emerging | Maryland Tax-free vs. Intermediate Term Bond Fund | Maryland Tax-free vs. Ft 7934 Corporate |
| Federated High vs. Janus High Yield Fund | Federated High vs. Northeast Investors Trust | Federated High vs. High Yield Fund Investor | Federated High vs. Ab Sustainable Thematic |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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