Correlation Between Federated Municipal and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both Federated Municipal and Alliancebernstein 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 Alliancebernstein 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 Alliancebernstein National Municipalome, you can compare the effects of market volatilities on Federated Municipal and Alliancebernstein 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 Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Municipal and Alliancebernstein.
Diversification Opportunities for Federated Municipal and Alliancebernstein
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FEDERATED and Alliancebernstein is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Federated Municipal High and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein 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 Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Federated Municipal i.e., Federated Municipal and Alliancebernstein go up and down completely randomly.
Pair Corralation between Federated Municipal and Alliancebernstein
Assuming the 90 days horizon Federated Municipal is expected to generate 1.34 times less return on investment than Alliancebernstein. But when comparing it to its historical volatility, Federated Municipal High is 1.94 times less risky than Alliancebernstein. It trades about 0.29 of its potential returns per unit of risk. Alliancebernstein National Municipalome is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,168 in Alliancebernstein National Municipalome on September 6, 2025 and sell it today you would earn a total of 40.00 from holding Alliancebernstein National Municipalome or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Municipal High vs. Alliancebernstein National Mun
Performance |
| Timeline |
| Federated Municipal High |
| Alliancebernstein |
Federated Municipal and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Municipal and Alliancebernstein
The main advantage of trading using opposite Federated Municipal and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Municipal position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.| Federated Municipal vs. Federated Emerging Market | Federated Municipal vs. Federated Mdt All | Federated Municipal vs. Federated Mdt Balanced | Federated Municipal vs. Federated Global Allocation |
| Alliancebernstein vs. Vanguard Total Stock | Alliancebernstein vs. Vanguard 500 Index | Alliancebernstein vs. Vanguard Total Stock | Alliancebernstein vs. Vanguard Total Stock |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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