Correlation Between MT Bank and Federal Realty
Can any of the company-specific risk be diversified away by investing in both MT Bank and Federal Realty 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 MT Bank and Federal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MT Bank Corp and Federal Realty Investment, you can compare the effects of market volatilities on MT Bank and Federal Realty 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 MT Bank with a short position of Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and Federal Realty.
Diversification Opportunities for MT Bank and Federal Realty
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 0JW2 and Federal is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank Corp and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment and MT Bank 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 MT Bank Corp are associated (or correlated) with Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of MT Bank i.e., MT Bank and Federal Realty go up and down completely randomly.
Pair Corralation between MT Bank and Federal Realty
Assuming the 90 days trading horizon MT Bank Corp is expected to generate 1.5 times more return on investment than Federal Realty. However, MT Bank is 1.5 times more volatile than Federal Realty Investment. It trades about 0.05 of its potential returns per unit of risk. Federal Realty Investment is currently generating about 0.04 per unit of risk. If you would invest 13,408 in MT Bank Corp on September 14, 2024 and sell it today you would earn a total of 6,623 from holding MT Bank Corp or generate 49.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
MT Bank Corp vs. Federal Realty Investment
Performance |
| Timeline |
| MT Bank Corp |
| Federal Realty Investment |
MT Bank and Federal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MT Bank and Federal Realty
The main advantage of trading using opposite MT Bank and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank position performs unexpectedly, Federal Realty 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 Federal Realty will offset losses from the drop in Federal Realty's long position.| MT Bank vs. Charter Communications Cl | MT Bank vs. Schweiter Technologies AG | MT Bank vs. Gamma Communications PLC | MT Bank vs. Albion Technology General |
| Federal Realty vs. Sparebank 1 SR | Federal Realty vs. MT Bank Corp | Federal Realty vs. Charter Communications Cl | Federal Realty vs. Discover Financial Services |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |