Correlation Between Mid Cap and Federated Premier
Can any of the company-specific risk be diversified away by investing in both Mid Cap 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 Mid Cap and Federated Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap Growth and Federated Premier Municipal, you can compare the effects of market volatilities on Mid Cap 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 Mid Cap with a short position of Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Federated Premier.
Diversification Opportunities for Mid Cap and Federated Premier
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mid and Federated is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Growth and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier and Mid Cap 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 Mid Cap Growth 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 Mid Cap i.e., Mid Cap and Federated Premier go up and down completely randomly.
Pair Corralation between Mid Cap and Federated Premier
Assuming the 90 days horizon Mid Cap Growth is expected to under-perform the Federated Premier. In addition to that, Mid Cap is 2.55 times more volatile than Federated Premier Municipal. It trades about -0.08 of its total potential returns per unit of risk. Federated Premier Municipal is currently generating about 0.03 per unit of volatility. If you would invest 1,117 in Federated Premier Municipal on November 27, 2024 and sell it today you would earn a total of 9.00 from holding Federated Premier Municipal or generate 0.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.31% |
Values | Daily Returns |
Mid Cap Growth vs. Federated Premier Municipal
Performance |
Timeline |
Mid Cap Growth |
Federated Premier |
Mid Cap and Federated Premier Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mid Cap and Federated Premier
The main advantage of trading using opposite Mid Cap and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap 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.Mid Cap vs. Wasatch Small Cap | Mid Cap vs. Victory Trivalent International | Mid Cap vs. John Hancock Disciplined | Mid Cap vs. Mfs Mid Cap |
Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |