Correlation Between SIDETRADE and Federal Agricultural
Can any of the company-specific risk be diversified away by investing in both SIDETRADE 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 SIDETRADE and Federal Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIDETRADE EO 1 and Federal Agricultural Mortgage, you can compare the effects of market volatilities on SIDETRADE 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 SIDETRADE with a short position of Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIDETRADE and Federal Agricultural.
Diversification Opportunities for SIDETRADE and Federal Agricultural
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SIDETRADE and Federal is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SIDETRADE EO 1 and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural and SIDETRADE 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 SIDETRADE EO 1 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 SIDETRADE i.e., SIDETRADE and Federal Agricultural go up and down completely randomly.
Pair Corralation between SIDETRADE and Federal Agricultural
Assuming the 90 days horizon SIDETRADE EO 1 is expected to generate 1.52 times more return on investment than Federal Agricultural. However, SIDETRADE is 1.52 times more volatile than Federal Agricultural Mortgage. It trades about 0.19 of its potential returns per unit of risk. Federal Agricultural Mortgage is currently generating about -0.1 per unit of risk. If you would invest 22,100 in SIDETRADE EO 1 on October 30, 2024 and sell it today you would earn a total of 3,700 from holding SIDETRADE EO 1 or generate 16.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIDETRADE EO 1 vs. Federal Agricultural Mortgage
Performance |
| Timeline |
| SIDETRADE EO 1 |
| Federal Agricultural |
SIDETRADE and Federal Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIDETRADE and Federal Agricultural
The main advantage of trading using opposite SIDETRADE and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIDETRADE 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.| SIDETRADE vs. SOGECLAIR SA INH | SIDETRADE vs. Norwegian Air Shuttle | SIDETRADE vs. ALTAIR RES INC | SIDETRADE vs. SEALED AIR |
| Federal Agricultural vs. Aluminum of | Federal Agricultural vs. SOUTHWEST AIRLINES | Federal Agricultural vs. Southwest Airlines Co | Federal Agricultural vs. Jacquet Metal Service |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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