Correlation Between UPD Holding and Federal National
Can any of the company-specific risk be diversified away by investing in both UPD Holding and Federal National 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 UPD Holding and Federal National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UPD Holding Corp and Federal National Mortgage, you can compare the effects of market volatilities on UPD Holding and Federal National 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 UPD Holding with a short position of Federal National. Check out your portfolio center. Please also check ongoing floating volatility patterns of UPD Holding and Federal National.
Diversification Opportunities for UPD Holding and Federal National
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UPD and Federal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UPD Holding Corp and Federal National Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal National Mortgage and UPD Holding 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 UPD Holding Corp are associated (or correlated) with Federal National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal National Mortgage has no effect on the direction of UPD Holding i.e., UPD Holding and Federal National go up and down completely randomly.
Pair Corralation between UPD Holding and Federal National
Given the investment horizon of 90 days UPD Holding Corp is expected to under-perform the Federal National. But the pink sheet apears to be less risky and, when comparing its historical volatility, UPD Holding Corp is 1.03 times less risky than Federal National. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Federal National Mortgage is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 700,000 in Federal National Mortgage on September 3, 2024 and sell it today you would earn a total of 2,600,000 from holding Federal National Mortgage or generate 371.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UPD Holding Corp vs. Federal National Mortgage
Performance |
| Timeline |
| UPD Holding Corp |
| Federal National Mortgage |
UPD Holding and Federal National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UPD Holding and Federal National
The main advantage of trading using opposite UPD Holding and Federal National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UPD Holding position performs unexpectedly, Federal National 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 National will offset losses from the drop in Federal National's long position.| UPD Holding vs. Federal National Mortgage | UPD Holding vs. Shinhan Financial Group | UPD Holding vs. Woori Financial Group | UPD Holding vs. Grupo Aval |
| Federal National vs. Federal Home Loan | Federal National vs. Federal Home Loan | Federal National vs. Federal Home Loan | Federal National 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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