Correlation Between Federal Home and Fielmann Aktiengesellscha

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

By analyzing existing cross correlation between Federal Home Loan and Fielmann Aktiengesellschaft, you can compare the effects of market volatilities on Federal Home and Fielmann Aktiengesellscha 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 Home with a short position of Fielmann Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Home and Fielmann Aktiengesellscha.

Diversification Opportunities for Federal Home and Fielmann Aktiengesellscha

-0.89

Correlation Coefficient

Federal Home  Fielmann Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between Federal and Fielmann is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Federal Home Loan and Fielmann Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fielmann Aktiengesellscha and Federal Home 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 Home Loan are associated (or correlated) with Fielmann Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fielmann Aktiengesellscha has no effect on the direction of Federal Home i.e., Federal Home and Fielmann Aktiengesellscha go up and down completely randomly.

Pair Corralation between Federal Home and Fielmann Aktiengesellscha

Assuming the 90 days horizon Federal Home Loan is expected to generate 5.2 times more return on investment than Fielmann Aktiengesellscha. However, Federal Home is 5.2 times more volatile than Fielmann Aktiengesellschaft. It trades about 0.14 of its potential returns per unit of risk. Fielmann Aktiengesellschaft is currently generating about -0.03 per unit of risk. If you would invest  95.00  in Federal Home Loan on September 19, 2024 and sell it today you would earn a total of  143.00  from holding Federal Home Loan or generate 150.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.22%
Values	Daily Returns

Federal Home Loan  vs.  Fielmann Aktiengesellschaft

Federal Home Loan

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federal Home Loan are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Federal Home reported solid returns over the last few months and may actually be approaching a breakup point.

Fielmann Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fielmann Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Federal Home and Fielmann Aktiengesellscha

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

The idea behind Federal Home Loan and Fielmann Aktiengesellschaft 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.