Correlation Between Federated Municipal and T Rowe
Can any of the company-specific risk be diversified away by investing in both Federated Municipal and T Rowe 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 T Rowe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Municipal Ultrashort and T Rowe Price, you can compare the effects of market volatilities on Federated Municipal and T Rowe 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 T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Municipal and T Rowe.
Diversification Opportunities for Federated Municipal and T Rowe
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federated and TRECX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Federated Municipal Ultrashort and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price 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 Ultrashort are associated (or correlated) with T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Federated Municipal i.e., Federated Municipal and T Rowe go up and down completely randomly.
Pair Corralation between Federated Municipal and T Rowe
If you would invest 997.00 in Federated Municipal Ultrashort on April 4, 2025 and sell it today you would earn a total of 5.00 from holding Federated Municipal Ultrashort or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Federated Municipal Ultrashort vs. T Rowe Price
Performance |
| Timeline |
| Federated Municipal |
| T Rowe Price |
Risk-Adjusted Performance
OK
Weak | Strong |
Federated Municipal and T Rowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Municipal and T Rowe
The main advantage of trading using opposite Federated Municipal and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Municipal position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.| Federated Municipal vs. Simt Multi Asset Inflation | Federated Municipal vs. Ab Bond Inflation | Federated Municipal vs. Great West Inflation Protected Securities | Federated Municipal vs. Ab Bond Inflation |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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