Correlation Between Federal Realty and LBG Media
Can any of the company-specific risk be diversified away by investing in both Federal Realty and LBG Media 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 Realty and LBG Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Realty Investment and LBG Media PLC, you can compare the effects of market volatilities on Federal Realty and LBG Media 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 Realty with a short position of LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Realty and LBG Media.
Diversification Opportunities for Federal Realty and LBG Media
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federal and LBG is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC and Federal Realty 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 Realty Investment are associated (or correlated) with LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Federal Realty i.e., Federal Realty and LBG Media go up and down completely randomly.
Pair Corralation between Federal Realty and LBG Media
Assuming the 90 days trading horizon Federal Realty Investment is expected to generate 0.4 times more return on investment than LBG Media. However, Federal Realty Investment is 2.48 times less risky than LBG Media. It trades about -0.03 of its potential returns per unit of risk. LBG Media PLC is currently generating about -0.07 per unit of risk. If you would invest 11,535 in Federal Realty Investment on September 7, 2024 and sell it today you would lose (238.00) from holding Federal Realty Investment or give up 2.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Federal Realty Investment vs. LBG Media PLC
Performance |
Timeline |
Federal Realty Investment |
LBG Media PLC |
Federal Realty and LBG Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federal Realty and LBG Media
The main advantage of trading using opposite Federal Realty and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Realty position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.Federal Realty vs. Schweiter Technologies AG | Federal Realty vs. Allianz Technology Trust | Federal Realty vs. Playtech Plc | Federal Realty vs. Invesco Physical Silver |
LBG Media vs. Symphony Environmental Technologies | LBG Media vs. Schweiter Technologies AG | LBG Media vs. Ashtead Technology Holdings | LBG Media vs. Check Point Software |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
CEOs Directory Screen CEOs from public companies around the world |