Correlation Between METALL ZUG and Federal Realty
Can any of the company-specific risk be diversified away by investing in both METALL ZUG 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 METALL ZUG and Federal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METALL ZUG AG and Federal Realty Investment, you can compare the effects of market volatilities on METALL ZUG 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 METALL ZUG with a short position of Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of METALL ZUG and Federal Realty.
Diversification Opportunities for METALL ZUG and Federal Realty
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between METALL and Federal is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding METALL ZUG AG 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 METALL ZUG 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 METALL ZUG AG 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 METALL ZUG i.e., METALL ZUG and Federal Realty go up and down completely randomly.
Pair Corralation between METALL ZUG and Federal Realty
Assuming the 90 days trading horizon METALL ZUG AG is expected to under-perform the Federal Realty. In addition to that, METALL ZUG is 1.05 times more volatile than Federal Realty Investment. It trades about -0.08 of its total potential returns per unit of risk. Federal Realty Investment is currently generating about 0.04 per unit of volatility. 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 Against |
| Strength | Very Weak |
| Accuracy | 89.71% |
| Values | Daily Returns |
METALL ZUG AG vs. Federal Realty Investment
Performance |
| Timeline |
| METALL ZUG AG |
| Federal Realty Investment |
METALL ZUG and Federal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METALL ZUG and Federal Realty
The main advantage of trading using opposite METALL ZUG and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METALL ZUG 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.| METALL ZUG vs. Hong Kong Land | METALL ZUG vs. Neometals | METALL ZUG vs. Coor Service Management | METALL ZUG vs. Fidelity Sustainable USD |
| Federal Realty vs. Hong Kong Land | Federal Realty vs. Neometals | Federal Realty vs. Coor Service Management | Federal Realty vs. Fidelity Sustainable USD |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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