Correlation Between Federal Signal and Mechanical Technology
Can any of the company-specific risk be diversified away by investing in both Federal Signal and Mechanical Technology 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 Signal and Mechanical Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Signal and Mechanical Technology Incorporated, you can compare the effects of market volatilities on Federal Signal and Mechanical Technology 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 Signal with a short position of Mechanical Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Signal and Mechanical Technology.
Diversification Opportunities for Federal Signal and Mechanical Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and Mechanical is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Federal Signal and Mechanical Technology Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechanical Technology and Federal Signal 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 Signal are associated (or correlated) with Mechanical Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechanical Technology has no effect on the direction of Federal Signal i.e., Federal Signal and Mechanical Technology go up and down completely randomly.
Pair Corralation between Federal Signal and Mechanical Technology
If you would invest 7,475 in Federal Signal on January 20, 2024 and sell it today you would earn a total of 677.00 from holding Federal Signal or generate 9.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Federal Signal vs. Mechanical Technology Incorpor
Performance |
| Timeline |
| Federal Signal |
| Mechanical Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Federal Signal and Mechanical Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Signal and Mechanical Technology
The main advantage of trading using opposite Federal Signal and Mechanical Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Signal position performs unexpectedly, Mechanical Technology 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 Mechanical Technology will offset losses from the drop in Mechanical Technology's long position.| Federal Signal vs. Energy Recovery | Federal Signal vs. CECO Environmental Corp | Federal Signal vs. 374Water Common Stock | Federal Signal vs. CO2 Solutions |
| Mechanical Technology vs. Bank of America | Mechanical Technology vs. Sun Life Financial | Mechanical Technology vs. Grocery Outlet Holding | Mechanical Technology vs. BBB Foods |
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 CEOs Directory module to screen CEOs from public companies around the world.
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