Correlation Between Freddie Mac and Anglesey Mining
Can any of the company-specific risk be diversified away by investing in both Freddie Mac and Anglesey Mining 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 Freddie Mac and Anglesey Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freddie Mac and Anglesey Mining, you can compare the effects of market volatilities on Freddie Mac and Anglesey Mining 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 Freddie Mac with a short position of Anglesey Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freddie Mac and Anglesey Mining.
Diversification Opportunities for Freddie Mac and Anglesey Mining
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Freddie and Anglesey is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Freddie Mac and Anglesey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey Mining and Freddie Mac 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 Freddie Mac are associated (or correlated) with Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining has no effect on the direction of Freddie Mac i.e., Freddie Mac and Anglesey Mining go up and down completely randomly.
Pair Corralation between Freddie Mac and Anglesey Mining
Assuming the 90 days trading horizon Freddie Mac is expected to generate 1.38 times more return on investment than Anglesey Mining. However, Freddie Mac is 1.38 times more volatile than Anglesey Mining. It trades about 0.12 of its potential returns per unit of risk. Anglesey Mining is currently generating about -0.02 per unit of risk. If you would invest 44.00 in Freddie Mac on August 31, 2024 and sell it today you would earn a total of 264.00 from holding Freddie Mac or generate 600.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freddie Mac vs. Anglesey Mining
Performance |
| Timeline |
| Freddie Mac |
| Anglesey Mining |
Freddie Mac and Anglesey Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freddie Mac and Anglesey Mining
The main advantage of trading using opposite Freddie Mac and Anglesey Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freddie Mac position performs unexpectedly, Anglesey Mining 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 Anglesey Mining will offset losses from the drop in Anglesey Mining's long position.| Freddie Mac vs. Lowland Investment Co | Freddie Mac vs. Ryanair Holdings plc | Freddie Mac vs. Air Products Chemicals | Freddie Mac vs. Delta Air Lines |
| Anglesey Mining vs. European Metals Holdings | Anglesey Mining vs. Jacquet Metal Service | Anglesey Mining vs. Silvercorp Metals | Anglesey Mining vs. Future Metals NL |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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