Correlation Between Federal Agricultural and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Federal Agricultural and PARKEN Sport 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 PARKEN Sport 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 PARKEN Sport Entertainment, you can compare the effects of market volatilities on Federal Agricultural and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Agricultural and PARKEN Sport.
Diversification Opportunities for Federal Agricultural and PARKEN Sport
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federal and PARKEN is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and PARKEN Sport go up and down completely randomly.
Pair Corralation between Federal Agricultural and PARKEN Sport
Assuming the 90 days horizon Federal Agricultural Mortgage is expected to generate 0.81 times more return on investment than PARKEN Sport. However, Federal Agricultural Mortgage is 1.24 times less risky than PARKEN Sport. It trades about 0.01 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about -0.01 per unit of risk. If you would invest 18,800 in Federal Agricultural Mortgage on November 7, 2024 and sell it today you would earn a total of 0.00 from holding Federal Agricultural Mortgage or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federal Agricultural Mortgage vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Federal Agricultural |
| PARKEN Sport Enterta |
Federal Agricultural and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Agricultural and PARKEN Sport
The main advantage of trading using opposite Federal Agricultural and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| Federal Agricultural vs. SMA Solar Technology | Federal Agricultural vs. PATTIES FOODS | Federal Agricultural vs. Beta Systems Software | Federal Agricultural vs. Easy Software AG |
| PARKEN Sport vs. MICRONIC MYDATA | PARKEN Sport vs. SALESFORCE INC CDR | PARKEN Sport vs. Northern Data AG | PARKEN Sport vs. TERADATA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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