Correlation Between TRAINLINE PLC and FIRST SAVINGS
Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC and FIRST SAVINGS 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 TRAINLINE PLC and FIRST SAVINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAINLINE PLC LS and FIRST SAVINGS FINL, you can compare the effects of market volatilities on TRAINLINE PLC and FIRST SAVINGS 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 TRAINLINE PLC with a short position of FIRST SAVINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and FIRST SAVINGS.
Diversification Opportunities for TRAINLINE PLC and FIRST SAVINGS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TRAINLINE and FIRST is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and FIRST SAVINGS FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SAVINGS FINL and TRAINLINE PLC 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 TRAINLINE PLC LS are associated (or correlated) with FIRST SAVINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SAVINGS FINL has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and FIRST SAVINGS go up and down completely randomly.
Pair Corralation between TRAINLINE PLC and FIRST SAVINGS
Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to generate 0.6 times more return on investment than FIRST SAVINGS. However, TRAINLINE PLC LS is 1.67 times less risky than FIRST SAVINGS. It trades about -0.07 of its potential returns per unit of risk. FIRST SAVINGS FINL is currently generating about -0.11 per unit of risk. If you would invest 505.00 in TRAINLINE PLC LS on October 11, 2024 and sell it today you would lose (13.00) from holding TRAINLINE PLC LS or give up 2.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAINLINE PLC LS vs. FIRST SAVINGS FINL
Performance |
| Timeline |
| TRAINLINE PLC LS |
| FIRST SAVINGS FINL |
TRAINLINE PLC and FIRST SAVINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAINLINE PLC and FIRST SAVINGS
The main advantage of trading using opposite TRAINLINE PLC and FIRST SAVINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC position performs unexpectedly, FIRST SAVINGS 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 FIRST SAVINGS will offset losses from the drop in FIRST SAVINGS's long position.| TRAINLINE PLC vs. Broadcom | TRAINLINE PLC vs. Gruppo Mutuionline SpA | TRAINLINE PLC vs. YATRA ONLINE DL 0001 | TRAINLINE PLC vs. Liberty Broadband |
| FIRST SAVINGS vs. TRAINLINE PLC LS | FIRST SAVINGS vs. TITANIUM TRANSPORTGROUP | FIRST SAVINGS vs. Cleanaway Waste Management | FIRST SAVINGS vs. TYSON FOODS A |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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