Correlation Between Discover Financial and Federal Agricultural
Can any of the company-specific risk be diversified away by investing in both Discover Financial and Federal Agricultural 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 Discover Financial and Federal Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and Federal Agricultural Mortgage, you can compare the effects of market volatilities on Discover Financial and Federal Agricultural 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 Discover Financial with a short position of Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and Federal Agricultural.
Diversification Opportunities for Discover Financial and Federal Agricultural
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Discover and Federal is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural and Discover Financial 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 Discover Financial Services are associated (or correlated) with Federal Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Agricultural has no effect on the direction of Discover Financial i.e., Discover Financial and Federal Agricultural go up and down completely randomly.
Pair Corralation between Discover Financial and Federal Agricultural
If you would invest 20,005 in Discover Financial Services on August 18, 2025 and sell it today you would earn a total of 0.00 from holding Discover Financial Services or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 1.54% |
| Values | Daily Returns |
Discover Financial Services vs. Federal Agricultural Mortgage
Performance |
| Timeline |
| Discover Financial |
Risk-Adjusted Performance
Weakest
Weak | Strong |
| Federal Agricultural |
Discover Financial and Federal Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and Federal Agricultural
The main advantage of trading using opposite Discover Financial and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, Federal Agricultural 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 Agricultural will offset losses from the drop in Federal Agricultural's long position.| Discover Financial vs. Citigroup | Discover Financial vs. Goldman Sachs Group | Discover Financial vs. KKR Co LP | Discover Financial vs. Lucid Group |
| Federal Agricultural vs. Western Union Co | Federal Agricultural vs. goeasy | Federal Agricultural vs. Atlanticus Holdings | Federal Agricultural vs. Finance of America |
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 Stocks Directory module to find actively traded stocks across global markets.
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