Correlation Between Bts Tactical and Federated Municipal
Can any of the company-specific risk be diversified away by investing in both Bts Tactical and Federated Municipal 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 Bts Tactical and Federated Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bts Tactical Fixed and Federated Municipal Ultrashort, you can compare the effects of market volatilities on Bts Tactical and Federated Municipal 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 Bts Tactical with a short position of Federated Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bts Tactical and Federated Municipal.
Diversification Opportunities for Bts Tactical and Federated Municipal
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bts and Federated is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bts Tactical Fixed and Federated Municipal Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Municipal and Bts Tactical 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 Bts Tactical Fixed are associated (or correlated) with Federated Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Municipal has no effect on the direction of Bts Tactical i.e., Bts Tactical and Federated Municipal go up and down completely randomly.
Pair Corralation between Bts Tactical and Federated Municipal
Assuming the 90 days horizon Bts Tactical Fixed is expected to generate 3.75 times more return on investment than Federated Municipal. However, Bts Tactical is 3.75 times more volatile than Federated Municipal Ultrashort. It trades about 0.16 of its potential returns per unit of risk. Federated Municipal Ultrashort is currently generating about 0.23 per unit of risk. If you would invest 750.00 in Bts Tactical Fixed on May 1, 2025 and sell it today you would earn a total of 18.00 from holding Bts Tactical Fixed or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bts Tactical Fixed vs. Federated Municipal Ultrashort
Performance |
| Timeline |
| Bts Tactical Fixed |
| Federated Municipal |
Bts Tactical and Federated Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bts Tactical and Federated Municipal
The main advantage of trading using opposite Bts Tactical and Federated Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bts Tactical position performs unexpectedly, Federated Municipal 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 Municipal will offset losses from the drop in Federated Municipal's long position.| Bts Tactical vs. Prudential California Muni | Bts Tactical vs. Alpine Ultra Short | Bts Tactical vs. California Municipal Portfolio | Bts Tactical vs. Gurtin California Muni |
| Federated Municipal vs. Fbanjx | Federated Municipal vs. Wmcanx | Federated Municipal vs. Ab Value Fund | Federated Municipal vs. Wabmsx |
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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