Correlation Between Federated Investors and Blackrock Muni

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Can any of the company-specific risk be diversified away by investing in both Federated Investors and Blackrock Muni 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 Investors and Blackrock Muni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Investors B and Blackrock Muni Intermediate, you can compare the effects of market volatilities on Federated Investors and Blackrock Muni 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 Investors with a short position of Blackrock Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Investors and Blackrock Muni.

Diversification Opportunities for Federated Investors and Blackrock Muni

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Federated and Blackrock is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Federated Investors B and Blackrock Muni Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muni Inter and Federated Investors 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 Investors B are associated (or correlated) with Blackrock Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muni Inter has no effect on the direction of Federated Investors i.e., Federated Investors and Blackrock Muni go up and down completely randomly.

Pair Corralation between Federated Investors and Blackrock Muni

Considering the 90-day investment horizon Federated Investors B is expected to generate 2.28 times more return on investment than Blackrock Muni. However, Federated Investors is 2.28 times more volatile than Blackrock Muni Intermediate. It trades about 0.05 of its potential returns per unit of risk. Blackrock Muni Intermediate is currently generating about 0.07 per unit of risk. If you would invest  3,228  in Federated Investors B on September 6, 2024 and sell it today you would earn a total of  1,052  from holding Federated Investors B or generate 32.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Federated Investors B  vs.  Blackrock Muni Intermediate

 Performance 
       Timeline  
Federated Investors 

Risk-Adjusted Performance

26 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Federated Investors B are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical indicators, Federated Investors demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Blackrock Muni Inter 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muni Intermediate are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong basic indicators, Blackrock Muni is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Federated Investors and Blackrock Muni Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Federated Investors and Blackrock Muni

The main advantage of trading using opposite Federated Investors and Blackrock Muni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Investors position performs unexpectedly, Blackrock Muni 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 Blackrock Muni will offset losses from the drop in Blackrock Muni's long position.
The idea behind Federated Investors B and Blackrock Muni Intermediate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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