Correlation Between BigBearai Holdings and Federal Natl

Can any of the company-specific risk be diversified away by investing in both BigBearai Holdings and Federal Natl 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 BigBearai Holdings and Federal Natl into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BigBearai Holdings and Federal Natl Pfd, you can compare the effects of market volatilities on BigBearai Holdings and Federal Natl 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 BigBearai Holdings with a short position of Federal Natl. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and Federal Natl.

Diversification Opportunities for BigBearai Holdings and Federal Natl

0.39

Correlation Coefficient

BigBearai Holdings  Federal Natl

Weak diversification

The 3 months correlation between BigBearai and Federal is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and Federal Natl Pfd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Natl Pfd and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with Federal Natl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Natl Pfd has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and Federal Natl go up and down completely randomly.

Pair Corralation between BigBearai Holdings and Federal Natl

Given the investment horizon of 90 days BigBearai Holdings is expected to under-perform the Federal Natl. In addition to that, BigBearai Holdings is 3.96 times more volatile than Federal Natl Pfd. It trades about -0.02 of its total potential returns per unit of risk. Federal Natl Pfd is currently generating about 0.04 per unit of volatility. If you would invest  1,790  in Federal Natl Pfd on December 29, 2024 and sell it today you would earn a total of  67.00  from holding Federal Natl Pfd or generate 3.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BigBearai Holdings  vs.  Federal Natl Pfd

BigBearai Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days BigBearai Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Federal Natl Pfd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Federal Natl Pfd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Federal Natl is not utilizing all of its potentials. The new stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with BigBearai Holdings and Federal Natl

The main advantage of trading using opposite BigBearai Holdings and Federal Natl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBearai Holdings position performs unexpectedly, Federal Natl 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 Natl will offset losses from the drop in Federal Natl's long position.

The idea behind BigBearai Holdings and Federal Natl Pfd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.