Correlation Between Federal Home and Astronics
Can any of the company-specific risk be diversified away by investing in both Federal Home and Astronics 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 Astronics 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 Astronics, you can compare the effects of market volatilities on Federal Home and Astronics 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 Astronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Home and Astronics.
Diversification Opportunities for Federal Home and Astronics
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federal and Astronics is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Federal Home Loan and Astronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics 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 Astronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics has no effect on the direction of Federal Home i.e., Federal Home and Astronics go up and down completely randomly.
Pair Corralation between Federal Home and Astronics
Assuming the 90 days horizon Federal Home is expected to generate 2.26 times less return on investment than Astronics. But when comparing it to its historical volatility, Federal Home Loan is 1.39 times less risky than Astronics. It trades about 0.13 of its potential returns per unit of risk. Astronics is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,303 in Astronics on May 1, 2025 and sell it today you would earn a total of 1,162 from holding Astronics or generate 50.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Home Loan vs. Astronics
Performance |
| Timeline |
| Federal Home Loan |
| Astronics |
Federal Home and Astronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Home and Astronics
The main advantage of trading using opposite Federal Home and Astronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Home position performs unexpectedly, Astronics 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 Astronics will offset losses from the drop in Astronics' long position.| Federal Home vs. Federal Home Loan | Federal Home vs. Federal Home Loan | Federal Home vs. Federal Home Loan | Federal Home vs. Federal Home Loan |
| Astronics vs. Park Electrochemical | Astronics vs. Innovative Solutions and | Astronics vs. Ducommun Incorporated | Astronics vs. National Presto Industries |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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