Correlation Between Federal National and GEO JS
Can any of the company-specific risk be diversified away by investing in both Federal National and GEO JS 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 GEO JS 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 GEO JS Tech, you can compare the effects of market volatilities on Federal National and GEO JS 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 GEO JS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal National and GEO JS.
Diversification Opportunities for Federal National and GEO JS
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and GEO is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Federal National Mortgage and GEO JS Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEO JS Tech 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 GEO JS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEO JS Tech has no effect on the direction of Federal National i.e., Federal National and GEO JS go up and down completely randomly.
Pair Corralation between Federal National and GEO JS
Assuming the 90 days horizon Federal National Mortgage is expected to generate 1.47 times more return on investment than GEO JS. However, Federal National is 1.47 times more volatile than GEO JS Tech. It trades about 0.09 of its potential returns per unit of risk. GEO JS Tech is currently generating about -0.16 per unit of risk. If you would invest 2,962,500 in Federal National Mortgage on September 14, 2024 and sell it today you would earn a total of 257,500 from holding Federal National Mortgage or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federal National Mortgage vs. GEO JS Tech
Performance |
| Timeline |
| Federal National Mortgage |
| GEO JS Tech |
Federal National and GEO JS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal National and GEO JS
The main advantage of trading using opposite Federal National and GEO JS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal National position performs unexpectedly, GEO JS 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 GEO JS will offset losses from the drop in GEO JS'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 |
| GEO JS vs. Garibaldi Resources Corp | GEO JS vs. Northern Dynasty Minerals | GEO JS vs. Asia Broadband | GEO JS vs. Avarone Metals |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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