Correlation Between Federal Realty and Lords Grp
Can any of the company-specific risk be diversified away by investing in both Federal Realty and Lords Grp 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 Lords Grp 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 Lords Grp Trading, you can compare the effects of market volatilities on Federal Realty and Lords Grp 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 Lords Grp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Lords Grp.
Diversification Opportunities for Federal Realty and Lords Grp
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Federal and Lords is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Lords Grp Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lords Grp 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 Lords Grp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lords Grp Trading has no effect on the direction of Federal Realty i.e., Federal Realty and Lords Grp go up and down completely randomly.
Pair Corralation between Federal Realty and Lords Grp
Assuming the 90 days trading horizon Federal Realty Investment is expected to generate 0.55 times more return on investment than Lords Grp. However, Federal Realty Investment is 1.81 times less risky than Lords Grp. It trades about 0.07 of its potential returns per unit of risk. Lords Grp Trading is currently generating about -0.05 per unit of risk. If you would invest 8,922 in Federal Realty Investment on August 31, 2024 and sell it today you would earn a total of 2,834 from holding Federal Realty Investment or generate 31.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.76% |
| Values | Daily Returns |
Federal Realty Investment vs. Lords Grp Trading
Performance |
| Timeline |
| Federal Realty Investment |
| Lords Grp Trading |
Federal Realty and Lords Grp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Lords Grp
The main advantage of trading using opposite Federal Realty and Lords Grp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, Lords Grp 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 Lords Grp will offset losses from the drop in Lords Grp'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 |
| Lords Grp vs. Naked Wines plc | Lords Grp vs. Lundin Mining Corp | Lords Grp vs. Taiwan Semiconductor Manufacturing | Lords Grp vs. GreenX 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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