Correlation Between Federal Realty and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both Federal Realty and Beeks Trading 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 Beeks Trading 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 Beeks Trading, you can compare the effects of market volatilities on Federal Realty and Beeks Trading 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 Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Beeks Trading.
Diversification Opportunities for Federal Realty and Beeks Trading
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federal and Beeks is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of Federal Realty i.e., Federal Realty and Beeks Trading go up and down completely randomly.
Pair Corralation between Federal Realty and Beeks Trading
Assuming the 90 days trading horizon Federal Realty Investment is expected to under-perform the Beeks Trading. But the stock apears to be less risky and, when comparing its historical volatility, Federal Realty Investment is 2.98 times less risky than Beeks Trading. The stock trades about -0.1 of its potential returns per unit of risk. The Beeks Trading is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 26,800 in Beeks Trading on September 12, 2024 and sell it today you would earn a total of 2,700 from holding Beeks Trading or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Federal Realty Investment vs. Beeks Trading
Performance |
| Timeline |
| Federal Realty Investment |
| Beeks Trading |
Federal Realty and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Beeks Trading
The main advantage of trading using opposite Federal Realty and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| Federal Realty vs. Hong Kong Land | Federal Realty vs. Neometals | Federal Realty vs. Coor Service Management | Federal Realty vs. Fidelity Sustainable USD |
| Beeks Trading vs. Home Depot | Beeks Trading vs. Chrysalis Investments | Beeks Trading vs. Neometals | Beeks Trading vs. Coor Service Management |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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