Correlation Between AgriBank FCB and Federal Agricultural
Can any of the company-specific risk be diversified away by investing in both AgriBank FCB 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 AgriBank FCB and Federal Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AgriBank FCB and Federal Agricultural Mortgage, you can compare the effects of market volatilities on AgriBank FCB 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 AgriBank FCB with a short position of Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of AgriBank FCB and Federal Agricultural.
Diversification Opportunities for AgriBank FCB and Federal Agricultural
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AgriBank and Federal is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding AgriBank FCB and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural and AgriBank FCB 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 AgriBank FCB 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 AgriBank FCB i.e., AgriBank FCB and Federal Agricultural go up and down completely randomly.
Pair Corralation between AgriBank FCB and Federal Agricultural
If you would invest 10,050 in AgriBank FCB on August 31, 2024 and sell it today you would earn a total of 0.00 from holding AgriBank FCB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
AgriBank FCB vs. Federal Agricultural Mortgage
Performance |
| Timeline |
| AgriBank FCB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Federal Agricultural |
AgriBank FCB and Federal Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AgriBank FCB and Federal Agricultural
The main advantage of trading using opposite AgriBank FCB and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AgriBank FCB 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.| AgriBank FCB vs. Associates First Capital | AgriBank FCB vs. Federal Agricultural Mortgage | AgriBank FCB vs. Federal Agricultural Mortgage | AgriBank FCB vs. Federal Agricultural Mortgage |
| Federal Agricultural vs. Federal Agricultural Mortgage | Federal Agricultural vs. Federal Agricultural Mortgage | Federal Agricultural vs. Federal Agricultural Mortgage | Federal Agricultural vs. The Allstate |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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