Correlation Between Federated Municipal and Locorr Market
Can any of the company-specific risk be diversified away by investing in both Federated Municipal and Locorr Market 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 Municipal and Locorr Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Municipal High and Locorr Market Trend, you can compare the effects of market volatilities on Federated Municipal and Locorr Market 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 Municipal with a short position of Locorr Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Municipal and Locorr Market.
Diversification Opportunities for Federated Municipal and Locorr Market
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FEDERATED and Locorr is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Federated Municipal High and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend and Federated Municipal 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 Municipal High are associated (or correlated) with Locorr Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of Federated Municipal i.e., Federated Municipal and Locorr Market go up and down completely randomly.
Pair Corralation between Federated Municipal and Locorr Market
Assuming the 90 days horizon Federated Municipal is expected to generate 2.19 times less return on investment than Locorr Market. But when comparing it to its historical volatility, Federated Municipal High is 5.3 times less risky than Locorr Market. It trades about 0.32 of its potential returns per unit of risk. Locorr Market Trend is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,049 in Locorr Market Trend on September 5, 2025 and sell it today you would earn a total of 70.00 from holding Locorr Market Trend or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Municipal High vs. Locorr Market Trend
Performance |
| Timeline |
| Federated Municipal High |
| Locorr Market Trend |
Federated Municipal and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Municipal and Locorr Market
The main advantage of trading using opposite Federated Municipal and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Municipal position performs unexpectedly, Locorr Market 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 Locorr Market will offset losses from the drop in Locorr Market's long position.| Federated Municipal vs. Mondrian Emerging Markets | Federated Municipal vs. Aqr Tm Emerging | Federated Municipal vs. Investec Emerging Markets | Federated Municipal vs. Angel Oak Multi Strategy |
| Locorr Market vs. Nuveen Wisconsin Municipal | Locorr Market vs. Federated Municipal High | Locorr Market vs. Bbh Intermediate Municipal | Locorr Market vs. Equalize Community Development |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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