Correlation Between Federal Agricultural and Upland Software
Can any of the company-specific risk be diversified away by investing in both Federal Agricultural and Upland Software 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 Agricultural and Upland Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Agricultural Mortgage and Upland Software, you can compare the effects of market volatilities on Federal Agricultural and Upland Software 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 Agricultural with a short position of Upland Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Agricultural and Upland Software.
Diversification Opportunities for Federal Agricultural and Upland Software
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federal and Upland is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and Upland Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upland Software and Federal Agricultural 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 Agricultural Mortgage are associated (or correlated) with Upland Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upland Software has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and Upland Software go up and down completely randomly.
Pair Corralation between Federal Agricultural and Upland Software
Assuming the 90 days horizon Federal Agricultural is expected to generate 1.04 times less return on investment than Upland Software. But when comparing it to its historical volatility, Federal Agricultural Mortgage is 2.5 times less risky than Upland Software. It trades about 0.07 of its potential returns per unit of risk. Upland Software is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 312.00 in Upland Software on August 25, 2024 and sell it today you would earn a total of 18.00 from holding Upland Software or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Agricultural Mortgage vs. Upland Software
Performance |
| Timeline |
| Federal Agricultural |
| Upland Software |
Federal Agricultural and Upland Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Agricultural and Upland Software
The main advantage of trading using opposite Federal Agricultural and Upland Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural position performs unexpectedly, Upland Software 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 Upland Software will offset losses from the drop in Upland Software's long position.| Federal Agricultural vs. Superior Plus Corp | Federal Agricultural vs. NMI Holdings | Federal Agricultural vs. Origin Agritech | Federal Agricultural vs. SIVERS SEMICONDUCTORS AB |
| Upland Software vs. Superior Plus Corp | Upland Software vs. NMI Holdings | Upland Software vs. Origin Agritech | Upland Software vs. SIVERS SEMICONDUCTORS AB |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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