Correlation Between Western Sierra and FEDEX
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By analyzing existing cross correlation between Western Sierra Mining and FEDEX P 34, you can compare the effects of market volatilities on Western Sierra and FEDEX 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 Western Sierra with a short position of FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Sierra and FEDEX.
Diversification Opportunities for Western Sierra and FEDEX
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and FEDEX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Western Sierra Mining and FEDEX P 34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 34 and Western Sierra 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 Western Sierra Mining are associated (or correlated) with FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 34 has no effect on the direction of Western Sierra i.e., Western Sierra and FEDEX go up and down completely randomly.
Pair Corralation between Western Sierra and FEDEX
Given the investment horizon of 90 days Western Sierra Mining is expected to generate 0.69 times more return on investment than FEDEX. However, Western Sierra Mining is 1.46 times less risky than FEDEX. It trades about 0.0 of its potential returns per unit of risk. FEDEX P 34 is currently generating about -0.17 per unit of risk. If you would invest 0.68 in Western Sierra Mining on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Western Sierra Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Western Sierra Mining vs. FEDEX P 34
Performance |
| Timeline |
| Western Sierra Mining |
| FEDEX P 34 |
Western Sierra and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Sierra and FEDEX
The main advantage of trading using opposite Western Sierra and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Sierra position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX's long position.| Western Sierra vs. Green Cures Botanical | Western Sierra vs. Cann American Corp | Western Sierra vs. Rimrock Gold Corp | Western Sierra vs. Galexxy Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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