Correlation Between Federal Agricultural and FANDIFI TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Federal Agricultural and FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY P, you can compare the effects of market volatilities on Federal Agricultural and FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Agricultural and FANDIFI TECHNOLOGY.
Diversification Opportunities for Federal Agricultural and FANDIFI TECHNOLOGY
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and FANDIFI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and FANDIFI TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FANDIFI TECHNOLOGY has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and FANDIFI TECHNOLOGY go up and down completely randomly.
Pair Corralation between Federal Agricultural and FANDIFI TECHNOLOGY
Assuming the 90 days horizon Federal Agricultural is expected to generate 8.44 times less return on investment than FANDIFI TECHNOLOGY. But when comparing it to its historical volatility, Federal Agricultural Mortgage is 11.7 times less risky than FANDIFI TECHNOLOGY. It trades about 0.06 of its potential returns per unit of risk. FANDIFI TECHNOLOGY P is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.20 in FANDIFI TECHNOLOGY P on October 11, 2024 and sell it today you would lose (3.15) from holding FANDIFI TECHNOLOGY P or give up 98.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Federal Agricultural Mortgage vs. FANDIFI TECHNOLOGY P
Performance |
| Timeline |
| Federal Agricultural |
| FANDIFI TECHNOLOGY |
Federal Agricultural and FANDIFI TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Agricultural and FANDIFI TECHNOLOGY
The main advantage of trading using opposite Federal Agricultural and FANDIFI TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural position performs unexpectedly, FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY will offset losses from the drop in FANDIFI TECHNOLOGY's long position.| Federal Agricultural vs. China Eastern Airlines | Federal Agricultural vs. AEGEAN AIRLINES | Federal Agricultural vs. ADRIATIC METALS LS 013355 | Federal Agricultural vs. SINGAPORE AIRLINES |
| FANDIFI TECHNOLOGY vs. Salesforce | FANDIFI TECHNOLOGY vs. Rocket Internet SE | FANDIFI TECHNOLOGY vs. Superior Plus Corp | FANDIFI TECHNOLOGY vs. NMI Holdings |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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