Correlation Between Bank Central and Federal Home
Can any of the company-specific risk be diversified away by investing in both Bank Central 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 Bank Central and Federal Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Federal Home Loan, you can compare the effects of market volatilities on Bank Central 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 Bank Central with a short position of Federal Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Federal Home.
Diversification Opportunities for Bank Central and Federal Home
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Federal is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Federal Home Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Home Loan and Bank Central 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 Bank Central Asia 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 Loan has no effect on the direction of Bank Central i.e., Bank Central and Federal Home go up and down completely randomly.
Pair Corralation between Bank Central and Federal Home
Assuming the 90 days horizon Bank Central is expected to generate 12.69 times less return on investment than Federal Home. But when comparing it to its historical volatility, Bank Central Asia is 3.61 times less risky than Federal Home. It trades about 0.03 of its potential returns per unit of risk. Federal Home Loan is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 356.00 in Federal Home Loan on September 12, 2024 and sell it today you would earn a total of 1,323 from holding Federal Home Loan or generate 371.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. Federal Home Loan
Performance |
| Timeline |
| Bank Central Asia |
| Federal Home Loan |
Bank Central and Federal Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Federal Home
The main advantage of trading using opposite Bank Central and Federal Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central 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.| Bank Central vs. PT Bank Rakyat | Bank Central vs. Morningstar Unconstrained Allocation | Bank Central vs. Bondbloxx ETF Trust | Bank Central vs. Spring Valley Acquisition |
| Federal Home vs. Federal Home Loan | Federal Home vs. Federal Home Loan | Federal Home vs. Federal National Mortgage | 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |