Correlation Between Federal Bank and UFO Moviez

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

By analyzing existing cross correlation between The Federal Bank and UFO Moviez India, you can compare the effects of market volatilities on Federal Bank and UFO Moviez 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 Bank with a short position of UFO Moviez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Bank and UFO Moviez.

Diversification Opportunities for Federal Bank and UFO Moviez

-0.34

Correlation Coefficient

Federal Bank  UFO Moviez

Very good diversification

The 3 months correlation between Federal and UFO is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding The Federal Bank and UFO Moviez India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UFO Moviez India and Federal Bank 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 The Federal Bank are associated (or correlated) with UFO Moviez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UFO Moviez India has no effect on the direction of Federal Bank i.e., Federal Bank and UFO Moviez go up and down completely randomly.

Pair Corralation between Federal Bank and UFO Moviez

Assuming the 90 days trading horizon The Federal Bank is expected to generate 0.64 times more return on investment than UFO Moviez. However, The Federal Bank is 1.57 times less risky than UFO Moviez. It trades about 0.07 of its potential returns per unit of risk. UFO Moviez India is currently generating about -0.03 per unit of risk. If you would invest  15,205  in The Federal Bank on October 9, 2024 and sell it today you would earn a total of  4,526  from holding The Federal Bank or generate 29.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.59%
Values	Daily Returns

The Federal Bank  vs.  UFO Moviez India

Federal Bank

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Federal Bank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental drivers, Federal Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

UFO Moviez India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UFO Moviez India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Federal Bank and UFO Moviez

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

The idea behind The Federal Bank and UFO Moviez India 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.