Correlation Between Federal Home and Great Portland
Can any of the company-specific risk be diversified away by investing in both Federal Home and Great Portland 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 Federal Home and Great Portland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Home Loan and Great Portland Estates, you can compare the effects of market volatilities on Federal Home and Great Portland 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 Federal Home with a short position of Great Portland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Home and Great Portland.
Diversification Opportunities for Federal Home and Great Portland
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and Great is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Federal Home Loan and Great Portland Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Portland Estates and Federal Home 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 Federal Home Loan are associated (or correlated) with Great Portland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Portland Estates has no effect on the direction of Federal Home i.e., Federal Home and Great Portland go up and down completely randomly.
Pair Corralation between Federal Home and Great Portland
Assuming the 90 days horizon Federal Home Loan is expected to generate 2.42 times more return on investment than Great Portland. However, Federal Home is 2.42 times more volatile than Great Portland Estates. It trades about 0.09 of its potential returns per unit of risk. Great Portland Estates is currently generating about -0.02 per unit of risk. If you would invest 35.00 in Federal Home Loan on September 12, 2024 and sell it today you would earn a total of 219.00 from holding Federal Home Loan or generate 625.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Home Loan vs. Great Portland Estates
Performance |
| Timeline |
| Federal Home Loan |
| Great Portland Estates |
Federal Home and Great Portland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Home and Great Portland
The main advantage of trading using opposite Federal Home and Great Portland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Home position performs unexpectedly, Great Portland 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 Great Portland will offset losses from the drop in Great Portland's long position.| Federal Home vs. DIVERSIFIED ROYALTY | Federal Home vs. Superior Plus Corp | Federal Home vs. SIVERS SEMICONDUCTORS AB | Federal Home vs. Norsk Hydro ASA |
| Great Portland vs. Office Properties Income | Great Portland vs. CITY OFFICE REIT | Great Portland vs. CREMECOMTRSBI DL 001 | Great Portland vs. Superior Plus Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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