Correlation Between Federal Realty and Weiss Korea
Can any of the company-specific risk be diversified away by investing in both Federal Realty and Weiss Korea 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 Weiss Korea 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 Weiss Korea Opportunity, you can compare the effects of market volatilities on Federal Realty and Weiss Korea 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 Weiss Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and Weiss Korea.
Diversification Opportunities for Federal Realty and Weiss Korea
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Federal and Weiss is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Weiss Korea Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiss Korea Opportunity 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 Weiss Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiss Korea Opportunity has no effect on the direction of Federal Realty i.e., Federal Realty and Weiss Korea go up and down completely randomly.
Pair Corralation between Federal Realty and Weiss Korea
Assuming the 90 days trading horizon Federal Realty Investment is expected to under-perform the Weiss Korea. But the stock apears to be less risky and, when comparing its historical volatility, Federal Realty Investment is 4.17 times less risky than Weiss Korea. The stock trades about -0.2 of its potential returns per unit of risk. The Weiss Korea Opportunity is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 13,700 in Weiss Korea Opportunity on October 20, 2024 and sell it today you would earn a total of 2,512 from holding Weiss Korea Opportunity or generate 18.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Realty Investment vs. Weiss Korea Opportunity
Performance |
| Timeline |
| Federal Realty Investment |
| Weiss Korea Opportunity |
Federal Realty and Weiss Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Realty and Weiss Korea
The main advantage of trading using opposite Federal Realty and Weiss Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, Weiss Korea 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 Weiss Korea will offset losses from the drop in Weiss Korea's long position.| Federal Realty vs. G5 Entertainment AB | Federal Realty vs. Intermediate Capital Group | Federal Realty vs. Summit Materials Cl | Federal Realty vs. Live Nation Entertainment |
| Weiss Korea vs. Empire Metals Limited | Weiss Korea vs. Blackrock World Mining | Weiss Korea vs. Clean Power Hydrogen | Weiss Korea vs. CNH Industrial NV |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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