Correlation Between FC Investment and Federal Realty
Can any of the company-specific risk be diversified away by investing in both FC Investment 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 FC Investment and Federal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Federal Realty Investment, you can compare the effects of market volatilities on FC Investment 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 FC Investment with a short position of Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Federal Realty.
Diversification Opportunities for FC Investment and Federal Realty
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between FCIT and Federal is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust 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 FC Investment 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 FC Investment Trust 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 FC Investment i.e., FC Investment and Federal Realty go up and down completely randomly.
Pair Corralation between FC Investment and Federal Realty
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.81 times more return on investment than Federal Realty. However, FC Investment Trust is 1.23 times less risky than Federal Realty. It trades about 0.44 of its potential returns per unit of risk. Federal Realty Investment is currently generating about 0.15 per unit of risk. If you would invest 104,800 in FC Investment Trust on August 31, 2024 and sell it today you would earn a total of 7,600 from holding FC Investment Trust or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Federal Realty Investment
Performance |
| Timeline |
| FC Investment Trust |
| Federal Realty Investment |
FC Investment and Federal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Federal Realty
The main advantage of trading using opposite FC Investment and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment 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.| FC Investment vs. Alaska Air Group | FC Investment vs. DXC Technology Co | FC Investment vs. Porvair plc | FC Investment vs. AIM ImmunoTech |
| Federal Realty vs. Mindflair Plc | Federal Realty vs. Sealed Air Corp | Federal Realty vs. Worldwide Healthcare Trust | Federal Realty vs. Fair Oaks Income |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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