Correlation Between Federal Agricultural and FirstCash

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

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

Diversification Opportunities for Federal Agricultural and FirstCash

-0.07

Correlation Coefficient

Federal Agricultural  FirstCash

Good diversification

The 3 months correlation between Federal and FirstCash is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and FirstCash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstCash and Federal Agricultural 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 Agricultural Mortgage are associated (or correlated) with FirstCash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstCash has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and FirstCash go up and down completely randomly.

Pair Corralation between Federal Agricultural and FirstCash

Considering the 90-day investment horizon Federal Agricultural Mortgage is expected to under-perform the FirstCash. But the stock apears to be less risky and, when comparing its historical volatility, Federal Agricultural Mortgage is 1.3 times less risky than FirstCash. The stock trades about -0.07 of its potential returns per unit of risk. The FirstCash is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  13,310  in FirstCash on July 23, 2025 and sell it today you would earn a total of  2,028  from holding FirstCash or generate 15.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Federal Agricultural Mortgage  vs.  FirstCash

Federal Agricultural

Risk-Adjusted Performance

Weakest

Over the last 90 days Federal Agricultural Mortgage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

FirstCash

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FirstCash are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, FirstCash unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Federal Agricultural and FirstCash

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

The idea behind Federal Agricultural Mortgage and FirstCash 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.