Correlation Between Federal National and Alkame Holdings
Can any of the company-specific risk be diversified away by investing in both Federal National and Alkame Holdings 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 Alkame Holdings 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 Alkame Holdings, you can compare the effects of market volatilities on Federal National and Alkame Holdings 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 Alkame Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal National and Alkame Holdings.
Diversification Opportunities for Federal National and Alkame Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and Alkame is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Federal National Mortgage and Alkame Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkame Holdings 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 Alkame Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkame Holdings has no effect on the direction of Federal National i.e., Federal National and Alkame Holdings go up and down completely randomly.
Pair Corralation between Federal National and Alkame Holdings
Assuming the 90 days horizon Federal National Mortgage is expected to generate 1.03 times more return on investment than Alkame Holdings. However, Federal National is 1.03 times more volatile than Alkame Holdings. It trades about 0.27 of its potential returns per unit of risk. Alkame Holdings is currently generating about -0.22 per unit of risk. If you would invest 1,300,000 in Federal National Mortgage on September 4, 2024 and sell it today you would earn a total of 2,000,000 from holding Federal National Mortgage or generate 153.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Federal National Mortgage vs. Alkame Holdings
Performance |
| Timeline |
| Federal National Mortgage |
| Alkame Holdings |
Federal National and Alkame Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal National and Alkame Holdings
The main advantage of trading using opposite Federal National and Alkame Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal National position performs unexpectedly, Alkame Holdings 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 Alkame Holdings will offset losses from the drop in Alkame Holdings' long position.| Federal National vs. Federal Home Loan | Federal National vs. Federal Home Loan | Federal National vs. Federal Home Loan | Federal National vs. Federal Home Loan |
| Alkame Holdings vs. Federal National Mortgage | Alkame Holdings vs. Shinhan Financial Group | Alkame Holdings vs. Woori Financial Group | Alkame Holdings vs. Grupo Aval |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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