Correlation Between Federal Realty and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both Federal Realty and EVS Broadcast 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 Federal Realty and EVS Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Realty Investment and EVS Broadcast Equipment, you can compare the effects of market volatilities on Federal Realty and EVS Broadcast 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 Federal Realty with a short position of EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and EVS Broadcast.
Diversification Opportunities for Federal Realty and EVS Broadcast
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federal and EVS is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment and Federal Realty 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 Federal Realty Investment are associated (or correlated) with EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of Federal Realty i.e., Federal Realty and EVS Broadcast go up and down completely randomly.
Pair Corralation between Federal Realty and EVS Broadcast
Assuming the 90 days trading horizon Federal Realty Investment is expected to generate 0.52 times more return on investment than EVS Broadcast. However, Federal Realty Investment is 1.91 times less risky than EVS Broadcast. It trades about 0.15 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about -0.02 per unit of risk. If you would invest 11,412 in Federal Realty Investment on August 31, 2024 and sell it today you would earn a total of 344.00 from holding Federal Realty Investment or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Realty Investment vs. EVS Broadcast Equipment
Performance |
| Timeline |
| Federal Realty Investment |
| EVS Broadcast Equipment |
Federal Realty and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and EVS Broadcast
The main advantage of trading using opposite Federal Realty and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, EVS Broadcast 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 EVS Broadcast will offset losses from the drop in EVS Broadcast's long position.| Federal Realty vs. Mindflair Plc | Federal Realty vs. Sealed Air Corp | Federal Realty vs. Worldwide Healthcare Trust | Federal Realty vs. Fair Oaks Income |
| EVS Broadcast vs. Neometals | EVS Broadcast vs. Coor Service Management | EVS Broadcast vs. Aeorema Communications Plc | EVS Broadcast vs. JLEN Environmental Assets |
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 CEOs Directory module to screen CEOs from public companies around the world.
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