Correlation Between Federal Agricultural and Brockhaus Capital
Can any of the company-specific risk be diversified away by investing in both Federal Agricultural and Brockhaus Capital 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 Brockhaus Capital 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 Brockhaus Capital Management, you can compare the effects of market volatilities on Federal Agricultural and Brockhaus Capital 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 Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Agricultural and Brockhaus Capital.
Diversification Opportunities for Federal Agricultural and Brockhaus Capital
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and Brockhaus is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital 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 Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and Brockhaus Capital go up and down completely randomly.
Pair Corralation between Federal Agricultural and Brockhaus Capital
Assuming the 90 days horizon Federal Agricultural Mortgage is expected to generate 0.77 times more return on investment than Brockhaus Capital. However, Federal Agricultural Mortgage is 1.3 times less risky than Brockhaus Capital. It trades about 0.07 of its potential returns per unit of risk. Brockhaus Capital Management is currently generating about -0.05 per unit of risk. If you would invest 16,247 in Federal Agricultural Mortgage on September 25, 2024 and sell it today you would earn a total of 2,853 from holding Federal Agricultural Mortgage or generate 17.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Agricultural Mortgage vs. Brockhaus Capital Management
Performance |
| Timeline |
| Federal Agricultural |
| Brockhaus Capital |
Federal Agricultural and Brockhaus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Agricultural and Brockhaus Capital
The main advantage of trading using opposite Federal Agricultural and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital's long position.| Federal Agricultural vs. Vastned Retail NV | Federal Agricultural vs. Zoom Video Communications | Federal Agricultural vs. SUN ART RETAIL | Federal Agricultural vs. ECHO INVESTMENT ZY |
| Brockhaus Capital vs. PLAY2CHILL SA ZY | Brockhaus Capital vs. KRAKATAU STEEL B | Brockhaus Capital vs. USWE SPORTS AB | Brockhaus Capital vs. Tianjin Capital Environmental |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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