Correlation Between Federal National and Aztec Minerals
Can any of the company-specific risk be diversified away by investing in both Federal National and Aztec Minerals 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 National and Aztec Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal National Mortgage and Aztec Minerals Corp, you can compare the effects of market volatilities on Federal National and Aztec Minerals 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 National with a short position of Aztec Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal National and Aztec Minerals.
Diversification Opportunities for Federal National and Aztec Minerals
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federal and Aztec is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Federal National Mortgage and Aztec Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aztec Minerals Corp and Federal National 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 National Mortgage are associated (or correlated) with Aztec Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aztec Minerals Corp has no effect on the direction of Federal National i.e., Federal National and Aztec Minerals go up and down completely randomly.
Pair Corralation between Federal National and Aztec Minerals
Given the investment horizon of 90 days Federal National Mortgage is expected to generate 1.51 times more return on investment than Aztec Minerals. However, Federal National is 1.51 times more volatile than Aztec Minerals Corp. It trades about 0.42 of its potential returns per unit of risk. Aztec Minerals Corp is currently generating about 0.03 per unit of risk. If you would invest 255.00 in Federal National Mortgage on October 15, 2024 and sell it today you would earn a total of 271.00 from holding Federal National Mortgage or generate 106.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal National Mortgage vs. Aztec Minerals Corp
Performance |
| Timeline |
| Federal National Mortgage |
| Aztec Minerals Corp |
Federal National and Aztec Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal National and Aztec Minerals
The main advantage of trading using opposite Federal National and Aztec Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal National position performs unexpectedly, Aztec Minerals 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 Aztec Minerals will offset losses from the drop in Aztec Minerals' long position.| Federal National vs. China Clean Energy | Federal National vs. Yuexiu Transport Infrastructure | Federal National vs. Forsys Metals Corp | Federal National vs. FS KKR Capital |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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