Correlation Between Federal National and Four Leaf
Can any of the company-specific risk be diversified away by investing in both Federal National and Four Leaf 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 Four Leaf 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 Four Leaf Acquisition, you can compare the effects of market volatilities on Federal National and Four Leaf 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 Four Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal National and Four Leaf.
Diversification Opportunities for Federal National and Four Leaf
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federal and Four is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Federal National Mortgage and Four Leaf Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Leaf Acquisition 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 Four Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Leaf Acquisition has no effect on the direction of Federal National i.e., Federal National and Four Leaf go up and down completely randomly.
Pair Corralation between Federal National and Four Leaf
Assuming the 90 days horizon Federal National is expected to generate 10.54 times less return on investment than Four Leaf. But when comparing it to its historical volatility, Federal National Mortgage is 8.31 times less risky than Four Leaf. It trades about 0.11 of its potential returns per unit of risk. Four Leaf Acquisition is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Four Leaf Acquisition on July 18, 2025 and sell it today you would earn a total of 1.21 from holding Four Leaf Acquisition or generate 30.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 44.44% |
| Values | Daily Returns |
Federal National Mortgage vs. Four Leaf Acquisition
Performance |
| Timeline |
| Federal National Mortgage |
| Four Leaf Acquisition |
Risk-Adjusted Performance
Good
Weak | Strong |
Federal National and Four Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal National and Four Leaf
The main advantage of trading using opposite Federal National and Four Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal National position performs unexpectedly, Four Leaf 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 Four Leaf will offset losses from the drop in Four Leaf's long position.| Federal National vs. Loandepot | Federal National vs. TransAKT | Federal National vs. Ludwig Enterprises | Federal National vs. North America Frac |
| Four Leaf vs. BW Offshore Limited | Four Leaf vs. Hochschild Mining PLC | Four Leaf vs. Gaming Realms plc | Four Leaf vs. Integrated Drilling Equipment |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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