Correlation Between Federal National and Altigen Communications
Can any of the company-specific risk be diversified away by investing in both Federal National and Altigen Communications 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 National and Altigen Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal National Mortgage and Altigen Communications, you can compare the effects of market volatilities on Federal National and Altigen Communications 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 National with a short position of Altigen Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal National and Altigen Communications.
Diversification Opportunities for Federal National and Altigen Communications
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federal and Altigen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Federal National Mortgage and Altigen Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altigen Communications and Federal National 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 National Mortgage are associated (or correlated) with Altigen Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altigen Communications has no effect on the direction of Federal National i.e., Federal National and Altigen Communications go up and down completely randomly.
Pair Corralation between Federal National and Altigen Communications
Assuming the 90 days horizon Federal National Mortgage is expected to generate 0.74 times more return on investment than Altigen Communications. However, Federal National Mortgage is 1.35 times less risky than Altigen Communications. It trades about 0.06 of its potential returns per unit of risk. Altigen Communications is currently generating about 0.01 per unit of risk. If you would invest 3,800,000 in Federal National Mortgage on September 8, 2025 and sell it today you would earn a total of 1,150,000 from holding Federal National Mortgage or generate 30.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal National Mortgage vs. Altigen Communications
Performance |
| Timeline |
| Federal National Mortgage |
| Altigen Communications |
Federal National and Altigen Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal National and Altigen Communications
The main advantage of trading using opposite Federal National and Altigen Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal National position performs unexpectedly, Altigen Communications 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 Altigen Communications will offset losses from the drop in Altigen Communications' long position.| Federal National vs. Strategic Management and | Federal National vs. DATA Communications Management | Federal National vs. X FAB Silicon Foundries | Federal National vs. Kingboard Chemical Holdings |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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