Correlation Between Federal Home and Federal Home

Can any of the company-specific risk be diversified away by investing in both Federal Home and Federal Home 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 Federal Home 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 Federal Home Loan, you can compare the effects of market volatilities on Federal Home and Federal Home 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 Federal Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Home and Federal Home.

Diversification Opportunities for Federal Home and Federal Home

1.0

Correlation Coefficient

Federal Home  Federal Home

No risk reduction

The 3 months correlation between Federal and Federal is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Federal Home Loan and Federal Home Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Home Loan 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 Federal Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Home Loan has no effect on the direction of Federal Home i.e., Federal Home and Federal Home go up and down completely randomly.

Pair Corralation between Federal Home and Federal Home

Assuming the 90 days horizon Federal Home is expected to generate 1.11 times less return on investment than Federal Home. In addition to that, Federal Home is 1.57 times more volatile than Federal Home Loan. It trades about 0.36 of its total potential returns per unit of risk. Federal Home Loan is currently generating about 0.63 per unit of volatility. If you would invest  1,437  in Federal Home Loan on September 13, 2024 and sell it today you would earn a total of  263.00  from holding Federal Home Loan or generate 18.3% return on investment over 90 days.

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

Federal Home Loan  vs.  Federal Home Loan

Federal Home Loan

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federal Home Loan are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental indicators, Federal Home demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Federal Home Loan

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federal Home Loan are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental indicators, Federal Home reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Federal Home and Federal Home

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

The idea behind Federal Home Loan and Federal Home Loan 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.