Correlation Between Federal Agricultural and Data Modul
Can any of the company-specific risk be diversified away by investing in both Federal Agricultural and Data Modul 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 Data Modul 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 Data Modul AG, you can compare the effects of market volatilities on Federal Agricultural and Data Modul 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 Data Modul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Agricultural and Data Modul.
Diversification Opportunities for Federal Agricultural and Data Modul
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Federal and Data is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and Data Modul AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Modul AG 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 Data Modul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Modul AG has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and Data Modul go up and down completely randomly.
Pair Corralation between Federal Agricultural and Data Modul
Assuming the 90 days horizon Federal Agricultural Mortgage is expected to under-perform the Data Modul. But the stock apears to be less risky and, when comparing its historical volatility, Federal Agricultural Mortgage is 1.57 times less risky than Data Modul. The stock trades about -0.35 of its potential returns per unit of risk. The Data Modul AG is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 2,760 in Data Modul AG on October 12, 2024 and sell it today you would lose (80.00) from holding Data Modul AG or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Federal Agricultural Mortgage vs. Data Modul AG
Performance |
| Timeline |
| Federal Agricultural |
| Data Modul AG |
Federal Agricultural and Data Modul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Agricultural and Data Modul
The main advantage of trading using opposite Federal Agricultural and Data Modul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural position performs unexpectedly, Data Modul 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 Data Modul will offset losses from the drop in Data Modul's long position.| Federal Agricultural vs. REVO INSURANCE SPA | Federal Agricultural vs. CDN IMPERIAL BANK | Federal Agricultural vs. PNC Financial Services | Federal Agricultural vs. Guidewire Software |
| Data Modul vs. Chongqing Machinery Electric | Data Modul vs. Fevertree Drinks PLC | Data Modul vs. Federal Agricultural Mortgage | Data Modul vs. SAN MIGUEL BREWERY |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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