Correlation Between Federated Premier and CBH
Can any of the company-specific risk be diversified away by investing in both Federated Premier and CBH 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 CBH 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 CBH, you can compare the effects of market volatilities on Federated Premier and CBH 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 CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and CBH.
Diversification Opportunities for Federated Premier and CBH
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and CBH is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH 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 CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Federated Premier i.e., Federated Premier and CBH go up and down completely randomly.
Pair Corralation between Federated Premier and CBH
Considering the 90-day investment horizon Federated Premier Municipal is expected to generate 6.22 times more return on investment than CBH. However, Federated Premier is 6.22 times more volatile than CBH. It trades about 0.24 of its potential returns per unit of risk. CBH is currently generating about 0.29 per unit of risk. If you would invest 1,155 in Federated Premier Municipal on July 3, 2024 and sell it today you would earn a total of 87.00 from holding Federated Premier Municipal or generate 7.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 52.38% |
Values | Daily Returns |
Federated Premier Municipal vs. CBH
Performance |
Timeline |
Federated Premier |
CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Federated Premier and CBH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Premier and CBH
The main advantage of trading using opposite Federated Premier and CBH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, CBH 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 CBH will offset losses from the drop in CBH's long position.Federated Premier vs. Calamos Convertible Opportunities | Federated Premier vs. Calamos LongShort Equity | Federated Premier vs. DTF Tax Free | Federated Premier vs. Gabelli Global Small |
CBH vs. Eaton Vance National | CBH vs. Invesco High Income | CBH vs. Blackrock Muniholdings Ny | CBH vs. Nuveen California Select |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |