Correlation Between Federal Agricultural and Federal Agricultural

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Can any of the company-specific risk be diversified away by investing in both Federal Agricultural and Federal Agricultural 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 Federal Agricultural 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 Federal Agricultural Mortgage, you can compare the effects of market volatilities on Federal Agricultural and Federal Agricultural 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 Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Agricultural and Federal Agricultural.

Diversification Opportunities for Federal Agricultural and Federal Agricultural

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Federal and Federal is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural 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 Federal Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Agricultural has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and Federal Agricultural go up and down completely randomly.

Pair Corralation between Federal Agricultural and Federal Agricultural

Considering the 90-day investment horizon Federal Agricultural is expected to generate 1.68 times less return on investment than Federal Agricultural. But when comparing it to its historical volatility, Federal Agricultural Mortgage is 1.09 times less risky than Federal Agricultural. It trades about 0.18 of its potential returns per unit of risk. Federal Agricultural Mortgage is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  14,548  in Federal Agricultural Mortgage on August 27, 2024 and sell it today you would earn a total of  1,726  from holding Federal Agricultural Mortgage or generate 11.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy66.67%
ValuesDaily Returns

Federal Agricultural Mortgage  vs.  Federal Agricultural Mortgage

 Performance 
       Timeline  
Federal Agricultural 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Federal Agricultural Mortgage are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Federal Agricultural may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Federal Agricultural 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
OK
Over the last 90 days Federal Agricultural Mortgage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat unsteady basic indicators, Federal Agricultural sustained solid returns over the last few months and may actually be approaching a breakup point.

Federal Agricultural and Federal Agricultural Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Federal Agricultural and Federal Agricultural

The main advantage of trading using opposite Federal Agricultural and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural position performs unexpectedly, Federal Agricultural 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 Federal Agricultural will offset losses from the drop in Federal Agricultural's long position.
The idea behind Federal Agricultural Mortgage and Federal Agricultural Mortgage pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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