Correlation Between Brockhaus Capital and Federal Agricultural
Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital 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 Brockhaus Capital and Federal Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and Federal Agricultural Mortgage, you can compare the effects of market volatilities on Brockhaus Capital 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 Brockhaus Capital with a short position of Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and Federal Agricultural.
Diversification Opportunities for Brockhaus Capital and Federal Agricultural
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brockhaus and Federal is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural and Brockhaus Capital 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 Brockhaus Capital Management 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 Brockhaus Capital i.e., Brockhaus Capital and Federal Agricultural go up and down completely randomly.
Pair Corralation between Brockhaus Capital and Federal Agricultural
Assuming the 90 days trading horizon Brockhaus Capital Management is expected to under-perform the Federal Agricultural. In addition to that, Brockhaus Capital is 1.3 times more volatile than Federal Agricultural Mortgage. It trades about -0.05 of its total potential returns per unit of risk. Federal Agricultural Mortgage is currently generating about 0.07 per unit of volatility. If you would invest 16,247 in Federal Agricultural Mortgage on September 25, 2024 and sell it today you would earn a total of 2,853 from holding Federal Agricultural Mortgage or generate 17.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brockhaus Capital Management vs. Federal Agricultural Mortgage
Performance |
| Timeline |
| Brockhaus Capital |
| Federal Agricultural |
Brockhaus Capital and Federal Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brockhaus Capital and Federal Agricultural
The main advantage of trading using opposite Brockhaus Capital and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital 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.| Brockhaus Capital vs. PLAY2CHILL SA ZY | Brockhaus Capital vs. KRAKATAU STEEL B | Brockhaus Capital vs. USWE SPORTS AB | Brockhaus Capital vs. Tianjin Capital Environmental |
| Federal Agricultural vs. Vastned Retail NV | Federal Agricultural vs. Zoom Video Communications | Federal Agricultural vs. SUN ART RETAIL | Federal Agricultural vs. ECHO INVESTMENT ZY |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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