Correlation Between Federal Realty and Various Eateries
Can any of the company-specific risk be diversified away by investing in both Federal Realty and Various Eateries 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 Various Eateries 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 Various Eateries PLC, you can compare the effects of market volatilities on Federal Realty and Various Eateries 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 Various Eateries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Various Eateries.
Diversification Opportunities for Federal Realty and Various Eateries
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Federal and Various is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Various Eateries PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Various Eateries PLC 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 Various Eateries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Various Eateries PLC has no effect on the direction of Federal Realty i.e., Federal Realty and Various Eateries go up and down completely randomly.
Pair Corralation between Federal Realty and Various Eateries
Assuming the 90 days trading horizon Federal Realty Investment is expected to generate 0.82 times more return on investment than Various Eateries. However, Federal Realty Investment is 1.22 times less risky than Various Eateries. It trades about 0.04 of its potential returns per unit of risk. Various Eateries PLC is currently generating about -0.09 per unit of risk. If you would invest 9,723 in Federal Realty Investment on September 12, 2024 and sell it today you would earn a total of 1,553 from holding Federal Realty Investment or generate 15.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.77% |
| Values | Daily Returns |
Federal Realty Investment vs. Various Eateries PLC
Performance |
| Timeline |
| Federal Realty Investment |
| Various Eateries PLC |
Federal Realty and Various Eateries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Various Eateries
The main advantage of trading using opposite Federal Realty and Various Eateries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, Various Eateries 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 Various Eateries will offset losses from the drop in Various Eateries' long position.| Federal Realty vs. Hong Kong Land | Federal Realty vs. Neometals | Federal Realty vs. Coor Service Management | Federal Realty vs. Fidelity Sustainable USD |
| Various Eateries vs. National Atomic Co | Various Eateries vs. OTP Bank Nyrt | Various Eateries vs. Samsung Electronics Co | Various Eateries vs. Samsung Electronics Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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