Correlation Between Wmcanx and Federated Municipal
Can any of the company-specific risk be diversified away by investing in both Wmcanx 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 Wmcanx and Federated Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wmcanx and Federated Municipal Ultrashort, you can compare the effects of market volatilities on Wmcanx 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 Wmcanx with a short position of Federated Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wmcanx and Federated Municipal.
Diversification Opportunities for Wmcanx and Federated Municipal
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wmcanx and Federated is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Wmcanx and Federated Municipal Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Municipal and Wmcanx 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 Wmcanx 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 Wmcanx i.e., Wmcanx and Federated Municipal go up and down completely randomly.
Pair Corralation between Wmcanx and Federated Municipal
Assuming the 90 days trading horizon Wmcanx is expected to generate 9.68 times more return on investment than Federated Municipal. However, Wmcanx is 9.68 times more volatile than Federated Municipal Ultrashort. It trades about 0.19 of its potential returns per unit of risk. Federated Municipal Ultrashort is currently generating about 0.27 per unit of risk. If you would invest 1,772 in Wmcanx on June 12, 2025 and sell it today you would earn a total of 111.00 from holding Wmcanx or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wmcanx vs. Federated Municipal Ultrashort
Performance |
| Timeline |
| Wmcanx |
| Federated Municipal |
Wmcanx and Federated Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wmcanx and Federated Municipal
The main advantage of trading using opposite Wmcanx and Federated Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wmcanx 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.| Wmcanx vs. Pace Strategic Fixed | Wmcanx vs. Artisan High Income | Wmcanx vs. Versatile Bond Portfolio | Wmcanx vs. Bbh Intermediate Municipal |
| Federated Municipal vs. Aig Government Money | Federated Municipal vs. Ishares Municipal Bond | Federated Municipal vs. Intermediate Term Tax Free Bond | Federated Municipal vs. Ab Municipal Bond |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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