Correlation Between Federal Realty and Livermore Investments
Can any of the company-specific risk be diversified away by investing in both Federal Realty and Livermore Investments 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 Livermore Investments 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 Livermore Investments Group, you can compare the effects of market volatilities on Federal Realty and Livermore Investments 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 Livermore Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Livermore Investments.
Diversification Opportunities for Federal Realty and Livermore Investments
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federal and Livermore is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Livermore Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livermore Investments 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 Livermore Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livermore Investments has no effect on the direction of Federal Realty i.e., Federal Realty and Livermore Investments go up and down completely randomly.
Pair Corralation between Federal Realty and Livermore Investments
Assuming the 90 days trading horizon Federal Realty is expected to generate 1.78 times less return on investment than Livermore Investments. But when comparing it to its historical volatility, Federal Realty Investment is 1.49 times less risky than Livermore Investments. It trades about 0.15 of its potential returns per unit of risk. Livermore Investments Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,325 in Livermore Investments Group on August 31, 2024 and sell it today you would earn a total of 1,205 from holding Livermore Investments Group or generate 36.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.9% |
| Values | Daily Returns |
Federal Realty Investment vs. Livermore Investments Group
Performance |
| Timeline |
| Federal Realty Investment |
| Livermore Investments |
Federal Realty and Livermore Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Livermore Investments
The main advantage of trading using opposite Federal Realty and Livermore Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, Livermore Investments 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 Livermore Investments will offset losses from the drop in Livermore Investments' 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 |
| Livermore Investments vs. Samsung Electronics Co | Livermore Investments vs. Samsung Electronics Co | Livermore Investments vs. Hyundai Motor | Livermore Investments 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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