Correlation Between Firm Capital and Federal Realty
Can any of the company-specific risk be diversified away by investing in both Firm Capital and Federal Realty 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 Firm Capital and Federal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firm Capital Property and Federal Realty Investment, you can compare the effects of market volatilities on Firm Capital and Federal Realty 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 Firm Capital with a short position of Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firm Capital and Federal Realty.
Diversification Opportunities for Firm Capital and Federal Realty
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Firm and Federal is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Firm Capital Property and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment and Firm Capital 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 Firm Capital Property are associated (or correlated) with Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of Firm Capital i.e., Firm Capital and Federal Realty go up and down completely randomly.
Pair Corralation between Firm Capital and Federal Realty
Assuming the 90 days horizon Firm Capital Property is expected to generate 58.28 times more return on investment than Federal Realty. However, Firm Capital is 58.28 times more volatile than Federal Realty Investment. It trades about 0.06 of its potential returns per unit of risk. Federal Realty Investment is currently generating about 0.02 per unit of risk. If you would invest 324.00 in Firm Capital Property on August 31, 2024 and sell it today you would earn a total of 86.00 from holding Firm Capital Property or generate 26.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firm Capital Property vs. Federal Realty Investment
Performance |
| Timeline |
| Firm Capital Property |
| Federal Realty Investment |
Firm Capital and Federal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firm Capital and Federal Realty
The main advantage of trading using opposite Firm Capital and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firm Capital position performs unexpectedly, Federal Realty 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 Federal Realty will offset losses from the drop in Federal Realty's long position.| Firm Capital vs. Global Net Lease, | Firm Capital vs. Brightspire Capital | Firm Capital vs. NexPoint Strategic Opportunities | Firm Capital vs. Aquagold International |
| Federal Realty vs. Site Centers Corp | Federal Realty vs. Urban Edge Properties | Federal Realty vs. Retail Opportunity Investments | Federal Realty vs. Brixmor Property |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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