Correlation Between Qingdao Haier and Federal Agricultural
Can any of the company-specific risk be diversified away by investing in both Qingdao Haier and Federal Agricultural 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 Qingdao Haier and Federal Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qingdao Haier Co and Federal Agricultural Mortgage, you can compare the effects of market volatilities on Qingdao Haier and Federal Agricultural 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 Qingdao Haier with a short position of Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Haier and Federal Agricultural.
Diversification Opportunities for Qingdao Haier and Federal Agricultural
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Qingdao and Federal is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Haier Co and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural and Qingdao Haier 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 Qingdao Haier Co are associated (or correlated) with Federal Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Agricultural has no effect on the direction of Qingdao Haier i.e., Qingdao Haier and Federal Agricultural go up and down completely randomly.
Pair Corralation between Qingdao Haier and Federal Agricultural
Assuming the 90 days trading horizon Qingdao Haier Co is expected to generate 0.99 times more return on investment than Federal Agricultural. However, Qingdao Haier Co is 1.01 times less risky than Federal Agricultural. It trades about 0.11 of its potential returns per unit of risk. Federal Agricultural Mortgage is currently generating about 0.06 per unit of risk. If you would invest 105.00 in Qingdao Haier Co on September 12, 2024 and sell it today you would earn a total of 74.00 from holding Qingdao Haier Co or generate 70.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Haier Co vs. Federal Agricultural Mortgage
Performance |
| Timeline |
| Qingdao Haier |
| Federal Agricultural |
Qingdao Haier and Federal Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Haier and Federal Agricultural
The main advantage of trading using opposite Qingdao Haier and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Haier position performs unexpectedly, Federal Agricultural 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 Agricultural will offset losses from the drop in Federal Agricultural's long position.| Qingdao Haier vs. Federal Agricultural Mortgage | Qingdao Haier vs. PRECISION DRILLING P | Qingdao Haier vs. Chiba Bank | Qingdao Haier vs. VIRG NATL BANKSH |
| Federal Agricultural vs. Fair Isaac Corp | Federal Agricultural vs. Enter Air SA | Federal Agricultural vs. Ryanair Holdings plc | Federal Agricultural vs. Wizz Air Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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