Correlation Between Corning Incorporated and Federal Home
Can any of the company-specific risk be diversified away by investing in both Corning Incorporated and Federal Home 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 Corning Incorporated and Federal Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corning Incorporated and Federal Home 530, you can compare the effects of market volatilities on Corning Incorporated and Federal Home 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 Corning Incorporated with a short position of Federal Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corning Incorporated and Federal Home.
Diversification Opportunities for Corning Incorporated and Federal Home
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Corning and Federal is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and Federal Home 530 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Home 530 and Corning Incorporated 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 Corning Incorporated are associated (or correlated) with Federal Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Home 530 has no effect on the direction of Corning Incorporated i.e., Corning Incorporated and Federal Home go up and down completely randomly.
Pair Corralation between Corning Incorporated and Federal Home
Considering the 90-day investment horizon Corning Incorporated is expected to under-perform the Federal Home. In addition to that, Corning Incorporated is 1.26 times more volatile than Federal Home 530. It trades about -0.05 of its total potential returns per unit of risk. Federal Home 530 is currently generating about 0.6 per unit of volatility. If you would invest 1,603 in Federal Home 530 on October 10, 2024 and sell it today you would earn a total of 197.00 from holding Federal Home 530 or generate 12.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corning Incorporated vs. Federal Home 530
Performance |
| Timeline |
| Corning Incorporated |
| Federal Home 530 |
Corning Incorporated and Federal Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corning Incorporated and Federal Home
The main advantage of trading using opposite Corning Incorporated and Federal Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corning Incorporated position performs unexpectedly, Federal Home 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 Home will offset losses from the drop in Federal Home's long position.| Corning Incorporated vs. OSI Systems | Corning Incorporated vs. Fabrinet | Corning Incorporated vs. Jabil Circuit | Corning Incorporated vs. Vicor |
| Federal Home vs. Federal Home Loan | Federal Home vs. Federal Home Loan | Federal Home vs. Federal Home Loan | Federal Home vs. Federal Home Loan |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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