Correlation Between Elysee Development and Federated Investors
Can any of the company-specific risk be diversified away by investing in both Elysee Development and Federated Investors 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 Elysee Development and Federated Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elysee Development Corp and Federated Investors B, you can compare the effects of market volatilities on Elysee Development and Federated Investors 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 Elysee Development with a short position of Federated Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elysee Development and Federated Investors.
Diversification Opportunities for Elysee Development and Federated Investors
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elysee and Federated is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Elysee Development Corp and Federated Investors B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Investors and Elysee Development 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 Elysee Development Corp are associated (or correlated) with Federated Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Investors has no effect on the direction of Elysee Development i.e., Elysee Development and Federated Investors go up and down completely randomly.
Pair Corralation between Elysee Development and Federated Investors
Assuming the 90 days horizon Elysee Development Corp is expected to generate 3.25 times more return on investment than Federated Investors. However, Elysee Development is 3.25 times more volatile than Federated Investors B. It trades about 0.09 of its potential returns per unit of risk. Federated Investors B is currently generating about -0.07 per unit of risk. If you would invest 21.00 in Elysee Development Corp on January 24, 2024 and sell it today you would earn a total of 1.00 from holding Elysee Development Corp or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elysee Development Corp vs. Federated Investors B
Performance |
| Timeline |
| Elysee Development Corp |
| Federated Investors |
Elysee Development and Federated Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elysee Development and Federated Investors
The main advantage of trading using opposite Elysee Development and Federated Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elysee Development position performs unexpectedly, Federated Investors 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 Federated Investors will offset losses from the drop in Federated Investors' long position.| Elysee Development vs. Tri Continental Closed | Elysee Development vs. Adams Natural Resources | Elysee Development vs. Adams Diversified Equity | Elysee Development vs. Schroders PLC |
| Federated Investors vs. Federated Premier Municipal | Federated Investors vs. Blackrock Muniyield | Federated Investors vs. Diamond Hill Investment | Federated Investors vs. NXG NextGen Infrastructure |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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