Correlation Between Active Health and Federal National
Can any of the company-specific risk be diversified away by investing in both Active Health and Federal National 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 Active Health and Federal National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Active Health Foods and Federal National Mortgage, you can compare the effects of market volatilities on Active Health and Federal National 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 Active Health with a short position of Federal National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Active Health and Federal National.
Diversification Opportunities for Active Health and Federal National
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Active and Federal is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Active Health Foods and Federal National Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal National Mortgage and Active Health 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 Active Health Foods are associated (or correlated) with Federal National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal National Mortgage has no effect on the direction of Active Health i.e., Active Health and Federal National go up and down completely randomly.
Pair Corralation between Active Health and Federal National
Given the investment horizon of 90 days Active Health Foods is expected to generate 8.71 times more return on investment than Federal National. However, Active Health is 8.71 times more volatile than Federal National Mortgage. It trades about 0.06 of its potential returns per unit of risk. Federal National Mortgage is currently generating about 0.08 per unit of risk. If you would invest 0.03 in Active Health Foods on September 5, 2024 and sell it today you would lose (0.03) from holding Active Health Foods or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Active Health Foods vs. Federal National Mortgage
Performance |
| Timeline |
| Active Health Foods |
| Federal National Mortgage |
Active Health and Federal National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Active Health and Federal National
The main advantage of trading using opposite Active Health and Federal National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Active Health position performs unexpectedly, Federal National 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 National will offset losses from the drop in Federal National's long position.| Active Health vs. Federal National Mortgage | Active Health vs. Shinhan Financial Group | Active Health vs. Woori Financial Group | Active Health vs. Grupo Aval |
| Federal National vs. Federal Home Loan | Federal National vs. Federal Home Loan | Federal National vs. Federal Home Loan | Federal National vs. Federal Home Loan |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |