Correlation Between Federated Premier and RiverNorth Flexible

Can any of the company-specific risk be diversified away by investing in both Federated Premier and RiverNorth Flexible 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 Premier and RiverNorth Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Federated Premier Municipal and RiverNorth Flexible Municipalome, you can compare the effects of market volatilities on Federated Premier and RiverNorth Flexible 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 Premier with a short position of RiverNorth Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and RiverNorth Flexible.

Diversification Opportunities for Federated Premier and RiverNorth Flexible

0.93

Correlation Coefficient

Federated Premier  RiverNorth Flexible

Almost no diversification

The 3 months correlation between Federated and RiverNorth is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and RiverNorth Flexible Municipalo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorth Flexible and Federated Premier 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 Premier Municipal are associated (or correlated) with RiverNorth Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorth Flexible has no effect on the direction of Federated Premier i.e., Federated Premier and RiverNorth Flexible go up and down completely randomly.

Pair Corralation between Federated Premier and RiverNorth Flexible

Considering the 90-day investment horizon Federated Premier is expected to generate 3.15 times less return on investment than RiverNorth Flexible. In addition to that, Federated Premier is 1.14 times more volatile than RiverNorth Flexible Municipalome. It trades about 0.02 of its total potential returns per unit of risk. RiverNorth Flexible Municipalome is currently generating about 0.06 per unit of volatility. If you would invest  1,458  in RiverNorth Flexible Municipalome on December 30, 2024 and sell it today you would earn a total of  25.00  from holding RiverNorth Flexible Municipalome or generate 1.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Federated Premier Municipal  vs.  RiverNorth Flexible Municipalo

Federated Premier

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Premier Municipal are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy primary indicators, Federated Premier is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

RiverNorth Flexible

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RiverNorth Flexible Municipalome are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, RiverNorth Flexible is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Federated Premier and RiverNorth Flexible

The main advantage of trading using opposite Federated Premier and RiverNorth Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, RiverNorth Flexible 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 RiverNorth Flexible will offset losses from the drop in RiverNorth Flexible's long position.

The idea behind Federated Premier Municipal and RiverNorth Flexible Municipalome 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.