Correlation Between Federal Realty and Made Tech
Can any of the company-specific risk be diversified away by investing in both Federal Realty and Made Tech 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 Made Tech 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 Made Tech Group, you can compare the effects of market volatilities on Federal Realty and Made Tech 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 Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Made Tech.
Diversification Opportunities for Federal Realty and Made Tech
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federal and Made is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group 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 Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Federal Realty i.e., Federal Realty and Made Tech go up and down completely randomly.
Pair Corralation between Federal Realty and Made Tech
Assuming the 90 days trading horizon Federal Realty is expected to generate 2.56 times less return on investment than Made Tech. But when comparing it to its historical volatility, Federal Realty Investment is 3.42 times less risky than Made Tech. It trades about 0.03 of its potential returns per unit of risk. Made Tech Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,400 in Made Tech Group on September 3, 2024 and sell it today you would lose (100.00) from holding Made Tech Group or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.37% |
| Values | Daily Returns |
Federal Realty Investment vs. Made Tech Group
Performance |
| Timeline |
| Federal Realty Investment |
| Made Tech Group |
Federal Realty and Made Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Made Tech
The main advantage of trading using opposite Federal Realty and Made Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, Made Tech 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 Made Tech will offset losses from the drop in Made Tech's long position.| Federal Realty vs. Amedeo Air Four | Federal Realty vs. Sealed Air Corp | Federal Realty vs. European Metals Holdings | Federal Realty vs. Pentair PLC |
| Made Tech vs. Samsung Electronics Co | Made Tech vs. Samsung Electronics Co | Made Tech vs. Hyundai Motor | Made Tech 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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