Correlation Between Beeks Trading and Fannie Mae
Can any of the company-specific risk be diversified away by investing in both Beeks Trading and Fannie Mae 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 Beeks Trading and Fannie Mae into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beeks Trading and Fannie Mae, you can compare the effects of market volatilities on Beeks Trading and Fannie Mae 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 Beeks Trading with a short position of Fannie Mae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beeks Trading and Fannie Mae.
Diversification Opportunities for Beeks Trading and Fannie Mae
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Beeks and Fannie is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading and Fannie Mae in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fannie Mae and Beeks Trading 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 Beeks Trading are associated (or correlated) with Fannie Mae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fannie Mae has no effect on the direction of Beeks Trading i.e., Beeks Trading and Fannie Mae go up and down completely randomly.
Pair Corralation between Beeks Trading and Fannie Mae
Assuming the 90 days trading horizon Beeks Trading is expected to generate 193.69 times less return on investment than Fannie Mae. But when comparing it to its historical volatility, Beeks Trading is 5.36 times less risky than Fannie Mae. It trades about 0.01 of its potential returns per unit of risk. Fannie Mae is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 138.00 in Fannie Mae on September 2, 2024 and sell it today you would earn a total of 176.00 from holding Fannie Mae or generate 127.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Beeks Trading vs. Fannie Mae
Performance |
| Timeline |
| Beeks Trading |
| Fannie Mae |
Beeks Trading and Fannie Mae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beeks Trading and Fannie Mae
The main advantage of trading using opposite Beeks Trading and Fannie Mae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading position performs unexpectedly, Fannie Mae 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 Fannie Mae will offset losses from the drop in Fannie Mae's long position.| Beeks Trading vs. GreenX Metals | Beeks Trading vs. Neometals | Beeks Trading vs. Silvercorp Metals | Beeks Trading vs. Wheaton Precious Metals |
| Fannie Mae vs. Beeks Trading | Fannie Mae vs. Bankers Investment Trust | Fannie Mae vs. The Mercantile Investment | Fannie Mae vs. Smithson Investment Trust |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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