Correlation Between Federal National and Astra Energy
Can any of the company-specific risk be diversified away by investing in both Federal National and Astra Energy 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 Astra Energy 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 Astra Energy, you can compare the effects of market volatilities on Federal National and Astra Energy 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 Astra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal National and Astra Energy.
Diversification Opportunities for Federal National and Astra Energy
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and Astra is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Federal National Mortgage and Astra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Energy 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 Astra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Energy has no effect on the direction of Federal National i.e., Federal National and Astra Energy go up and down completely randomly.
Pair Corralation between Federal National and Astra Energy
Assuming the 90 days horizon Federal National Mortgage is expected to generate 0.64 times more return on investment than Astra Energy. However, Federal National Mortgage is 1.55 times less risky than Astra Energy. It trades about 0.09 of its potential returns per unit of risk. Astra Energy is currently generating about 0.03 per unit of risk. If you would invest 555,000 in Federal National Mortgage on October 25, 2024 and sell it today you would earn a total of 3,245,000 from holding Federal National Mortgage or generate 584.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Federal National Mortgage vs. Astra Energy
Performance |
| Timeline |
| Federal National Mortgage |
| Astra Energy |
Federal National and Astra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal National and Astra Energy
The main advantage of trading using opposite Federal National and Astra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal National position performs unexpectedly, Astra Energy 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 Astra Energy will offset losses from the drop in Astra Energy's 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 |
| Astra Energy vs. Alternus Energy Group | Astra Energy vs. American Security Resources | Astra Energy vs. Carnegie Clean Energy | Astra Energy vs. Brenmiller Energy Ltd |
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 CEOs Directory module to screen CEOs from public companies around the world.
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