Correlation Between Federal Realty and Hong Kong
Can any of the company-specific risk be diversified away by investing in both Federal Realty and Hong Kong 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 Hong Kong 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 Hong Kong Land, you can compare the effects of market volatilities on Federal Realty and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Hong Kong.
Diversification Opportunities for Federal Realty and Hong Kong
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and Hong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Hong Kong Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Land 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Land has no effect on the direction of Federal Realty i.e., Federal Realty and Hong Kong go up and down completely randomly.
Pair Corralation between Federal Realty and Hong Kong
Assuming the 90 days trading horizon Federal Realty Investment is expected to generate 9.15 times more return on investment than Hong Kong. However, Federal Realty is 9.15 times more volatile than Hong Kong Land. It trades about 0.04 of its potential returns per unit of risk. Hong Kong Land is currently generating about 0.08 per unit of risk. If you would invest 9,315 in Federal Realty Investment on September 12, 2024 and sell it today you would earn a total of 1,961 from holding Federal Realty Investment or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 93.75% |
| Values | Daily Returns |
Federal Realty Investment vs. Hong Kong Land
Performance |
| Timeline |
| Federal Realty Investment |
| Hong Kong Land |
Federal Realty and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Hong Kong
The main advantage of trading using opposite Federal Realty and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong'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 |
| Hong Kong vs. Wheaton Precious Metals | Hong Kong vs. Universal Display Corp | Hong Kong vs. Zoom Video Communications | Hong Kong vs. Cornish Metals |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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