Correlation Between Beeks Trading and Federal Realty
Can any of the company-specific risk be diversified away by investing in both Beeks Trading and Federal Realty 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 Federal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beeks Trading and Federal Realty Investment, you can compare the effects of market volatilities on Beeks Trading and Federal Realty 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 Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beeks Trading and Federal Realty.
Diversification Opportunities for Beeks Trading and Federal Realty
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beeks and Federal is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment 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 Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of Beeks Trading i.e., Beeks Trading and Federal Realty go up and down completely randomly.
Pair Corralation between Beeks Trading and Federal Realty
Assuming the 90 days trading horizon Beeks Trading is expected to generate 2.98 times more return on investment than Federal Realty. However, Beeks Trading is 2.98 times more volatile than Federal Realty Investment. It trades about 0.17 of its potential returns per unit of risk. Federal Realty Investment is currently generating about -0.1 per unit of risk. If you would invest 26,800 in Beeks Trading on September 12, 2024 and sell it today you would earn a total of 2,700 from holding Beeks Trading or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Beeks Trading vs. Federal Realty Investment
Performance |
| Timeline |
| Beeks Trading |
| Federal Realty Investment |
Beeks Trading and Federal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beeks Trading and Federal Realty
The main advantage of trading using opposite Beeks Trading and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading position performs unexpectedly, Federal Realty 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 Realty will offset losses from the drop in Federal Realty's long position.| Beeks Trading vs. Home Depot | Beeks Trading vs. Chrysalis Investments | Beeks Trading vs. Neometals | Beeks Trading vs. Coor Service Management |
| Federal Realty vs. Hong Kong Land | Federal Realty vs. Neometals | Federal Realty vs. Coor Service Management | Federal Realty vs. Fidelity Sustainable USD |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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