Correlation Between Federal Realty and Pets At
Can any of the company-specific risk be diversified away by investing in both Federal Realty and Pets At 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 Pets At 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 Pets at Home, you can compare the effects of market volatilities on Federal Realty and Pets At 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 Pets At. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Pets At.
Diversification Opportunities for Federal Realty and Pets At
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federal and Pets is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Pets at Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pets at Home 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 Pets At. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pets at Home has no effect on the direction of Federal Realty i.e., Federal Realty and Pets At go up and down completely randomly.
Pair Corralation between Federal Realty and Pets At
Assuming the 90 days trading horizon Federal Realty Investment is expected to generate 0.78 times more return on investment than Pets At. However, Federal Realty Investment is 1.28 times less risky than Pets At. It trades about 0.03 of its potential returns per unit of risk. Pets at Home is currently generating about 0.02 per unit of risk. If you would invest 9,843 in Federal Realty Investment on August 26, 2024 and sell it today you would earn a total of 1,641 from holding Federal Realty Investment or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.39% |
| Values | Daily Returns |
Federal Realty Investment vs. Pets at Home
Performance |
| Timeline |
| Federal Realty Investment |
| Pets at Home |
Federal Realty and Pets At Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Pets At
The main advantage of trading using opposite Federal Realty and Pets At positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, Pets At 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 Pets At will offset losses from the drop in Pets At's long position.| Federal Realty vs. Monster Beverage Corp | Federal Realty vs. Cizzle Biotechnology Holdings | Federal Realty vs. Ebro Foods | Federal Realty vs. CleanTech Lithium plc |
| Pets At vs. Federal Realty Investment | Pets At vs. Impax Asset Management | Pets At vs. The Mercantile Investment | Pets At vs. Liontrust Asset Management |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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