Correlation Between Federal Home and WINMARK
Can any of the company-specific risk be diversified away by investing in both Federal Home and WINMARK 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 WINMARK 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 WINMARK, you can compare the effects of market volatilities on Federal Home and WINMARK 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 WINMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Home and WINMARK.
Diversification Opportunities for Federal Home and WINMARK
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federal and WINMARK is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Federal Home Loan and WINMARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINMARK 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 WINMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINMARK has no effect on the direction of Federal Home i.e., Federal Home and WINMARK go up and down completely randomly.
Pair Corralation between Federal Home and WINMARK
Assuming the 90 days horizon Federal Home Loan is expected to generate 3.05 times more return on investment than WINMARK. However, Federal Home is 3.05 times more volatile than WINMARK. It trades about 0.14 of its potential returns per unit of risk. WINMARK is currently generating about 0.0 per unit of risk. If you would invest 60.00 in Federal Home Loan on September 4, 2024 and sell it today you would earn a total of 238.00 from holding Federal Home Loan or generate 396.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Home Loan vs. WINMARK
Performance |
| Timeline |
| Federal Home Loan |
| WINMARK |
Federal Home and WINMARK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Home and WINMARK
The main advantage of trading using opposite Federal Home and WINMARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Home position performs unexpectedly, WINMARK 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 WINMARK will offset losses from the drop in WINMARK's long position.| Federal Home vs. Superior Plus Corp | Federal Home vs. NMI Holdings | Federal Home vs. Origin Agritech | Federal Home vs. SIVERS SEMICONDUCTORS AB |
| WINMARK vs. Alaska Air Group | WINMARK vs. NORWEGIAN AIR SHUT | WINMARK vs. BROADSTNET LEADL 00025 | WINMARK vs. Transportadora de Gas |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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