Correlation Between BitFuFu and Federal Agricultural

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Can any of the company-specific risk be diversified away by investing in both BitFuFu 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 BitFuFu and Federal Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BitFuFu Class A and Federal Agricultural Mortgage, you can compare the effects of market volatilities on BitFuFu 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 BitFuFu with a short position of Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of BitFuFu and Federal Agricultural.

Diversification Opportunities for BitFuFu and Federal Agricultural

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between BitFuFu and Federal is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BitFuFu Class A and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural and BitFuFu 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 BitFuFu Class A 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 BitFuFu i.e., BitFuFu and Federal Agricultural go up and down completely randomly.

Pair Corralation between BitFuFu and Federal Agricultural

Given the investment horizon of 90 days BitFuFu Class A is expected to under-perform the Federal Agricultural. In addition to that, BitFuFu is 33.74 times more volatile than Federal Agricultural Mortgage. It trades about -0.03 of its total potential returns per unit of risk. Federal Agricultural Mortgage is currently generating about 0.14 per unit of volatility. If you would invest  2,474  in Federal Agricultural Mortgage on March 14, 2024 and sell it today you would earn a total of  50.00  from holding Federal Agricultural Mortgage or generate 2.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

BitFuFu Class A  vs.  Federal Agricultural Mortgage

 Performance 
       Timeline  
BitFuFu Class A 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BitFuFu Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Federal Agricultural 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Federal Agricultural Mortgage are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Federal Agricultural is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

BitFuFu and Federal Agricultural Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BitFuFu and Federal Agricultural

The main advantage of trading using opposite BitFuFu and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BitFuFu 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.
The idea behind BitFuFu Class A and Federal Agricultural Mortgage 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.
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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