Correlation Between Federal Realty and Blackrock World
Can any of the company-specific risk be diversified away by investing in both Federal Realty and Blackrock World 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 Blackrock World 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 Blackrock World Mining, you can compare the effects of market volatilities on Federal Realty and Blackrock World 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 Blackrock World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Blackrock World.
Diversification Opportunities for Federal Realty and Blackrock World
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federal and Blackrock is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Blackrock World Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock World Mining 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 Blackrock World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock World Mining has no effect on the direction of Federal Realty i.e., Federal Realty and Blackrock World go up and down completely randomly.
Pair Corralation between Federal Realty and Blackrock World
Assuming the 90 days trading horizon Federal Realty Investment is expected to generate 0.56 times more return on investment than Blackrock World. However, Federal Realty Investment is 1.8 times less risky than Blackrock World. It trades about 0.2 of its potential returns per unit of risk. Blackrock World Mining is currently generating about -0.13 per unit of risk. If you would invest 11,278 in Federal Realty Investment on August 30, 2024 and sell it today you would earn a total of 478.00 from holding Federal Realty Investment or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Realty Investment vs. Blackrock World Mining
Performance |
| Timeline |
| Federal Realty Investment |
| Blackrock World Mining |
Federal Realty and Blackrock World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Blackrock World
The main advantage of trading using opposite Federal Realty and Blackrock World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, Blackrock World 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 Blackrock World will offset losses from the drop in Blackrock World's long position.| Federal Realty vs. Tungsten West PLC | Federal Realty vs. Argo Group Limited | Federal Realty vs. Hardide PLC | Federal Realty vs. Versarien PLC |
| Blackrock World vs. Samsung Electronics Co | Blackrock World vs. Samsung Electronics Co | Blackrock World vs. Hyundai Motor | Blackrock World vs. Toyota Motor Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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