Correlation Between Federal Signal and Spectaire Holdings
Can any of the company-specific risk be diversified away by investing in both Federal Signal and Spectaire 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 Signal and Spectaire Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Signal and Spectaire Holdings, you can compare the effects of market volatilities on Federal Signal and Spectaire 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 Signal with a short position of Spectaire Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Signal and Spectaire Holdings.
Diversification Opportunities for Federal Signal and Spectaire Holdings
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federal and Spectaire is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Federal Signal and Spectaire Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectaire Holdings and Federal Signal 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 Signal are associated (or correlated) with Spectaire Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectaire Holdings has no effect on the direction of Federal Signal i.e., Federal Signal and Spectaire Holdings go up and down completely randomly.
Pair Corralation between Federal Signal and Spectaire Holdings
If you would invest 8,173 in Federal Signal on September 2, 2024 and sell it today you would earn a total of 1,568 from holding Federal Signal or generate 19.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Federal Signal vs. Spectaire Holdings
Performance |
| Timeline |
| Federal Signal |
| Spectaire Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Federal Signal and Spectaire Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Signal and Spectaire Holdings
The main advantage of trading using opposite Federal Signal and Spectaire Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Signal position performs unexpectedly, Spectaire 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 Spectaire Holdings will offset losses from the drop in Spectaire Holdings' long position.| Federal Signal vs. Energy Recovery | Federal Signal vs. CECO Environmental Corp | Federal Signal vs. 374Water Common Stock | Federal Signal vs. CO2 Solutions |
| Spectaire Holdings vs. Globalfoundries | Spectaire Holdings vs. Entegris | Spectaire Holdings vs. RCS MediaGroup SpA | Spectaire Holdings vs. Vishay Intertechnology |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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