Correlation Between Federal National and MAIA Biotechnology
Can any of the company-specific risk be diversified away by investing in both Federal National and MAIA Biotechnology 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 MAIA Biotechnology 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 MAIA Biotechnology, you can compare the effects of market volatilities on Federal National and MAIA Biotechnology 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 MAIA Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal National and MAIA Biotechnology.
Diversification Opportunities for Federal National and MAIA Biotechnology
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and MAIA is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Federal National Mortgage and MAIA Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAIA Biotechnology 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 MAIA Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAIA Biotechnology has no effect on the direction of Federal National i.e., Federal National and MAIA Biotechnology go up and down completely randomly.
Pair Corralation between Federal National and MAIA Biotechnology
Assuming the 90 days horizon Federal National Mortgage is expected to generate 0.47 times more return on investment than MAIA Biotechnology. However, Federal National Mortgage is 2.14 times less risky than MAIA Biotechnology. It trades about 0.24 of its potential returns per unit of risk. MAIA Biotechnology is currently generating about 0.01 per unit of risk. If you would invest 3,400,000 in Federal National Mortgage on October 25, 2024 and sell it today you would earn a total of 400,000 from holding Federal National Mortgage or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Federal National Mortgage vs. MAIA Biotechnology
Performance |
| Timeline |
| Federal National Mortgage |
| MAIA Biotechnology |
Federal National and MAIA Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal National and MAIA Biotechnology
The main advantage of trading using opposite Federal National and MAIA Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal National position performs unexpectedly, MAIA Biotechnology 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 MAIA Biotechnology will offset losses from the drop in MAIA Biotechnology'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 |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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