Correlation Between FIRST NATIONAL and Deutsche Pfandbriefbank
Can any of the company-specific risk be diversified away by investing in both FIRST NATIONAL and Deutsche Pfandbriefbank 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 FIRST NATIONAL and Deutsche Pfandbriefbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST NATIONAL FIN and Deutsche Pfandbriefbank AG, you can compare the effects of market volatilities on FIRST NATIONAL and Deutsche Pfandbriefbank 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 FIRST NATIONAL with a short position of Deutsche Pfandbriefbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST NATIONAL and Deutsche Pfandbriefbank.
Diversification Opportunities for FIRST NATIONAL and Deutsche Pfandbriefbank
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FIRST and Deutsche is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding FIRST NATIONAL FIN and Deutsche Pfandbriefbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Pfandbriefbank and FIRST 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 FIRST NATIONAL FIN are associated (or correlated) with Deutsche Pfandbriefbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Pfandbriefbank has no effect on the direction of FIRST NATIONAL i.e., FIRST NATIONAL and Deutsche Pfandbriefbank go up and down completely randomly.
Pair Corralation between FIRST NATIONAL and Deutsche Pfandbriefbank
Assuming the 90 days horizon FIRST NATIONAL FIN is expected to generate 0.82 times more return on investment than Deutsche Pfandbriefbank. However, FIRST NATIONAL FIN is 1.22 times less risky than Deutsche Pfandbriefbank. It trades about 0.06 of its potential returns per unit of risk. Deutsche Pfandbriefbank AG is currently generating about 0.02 per unit of risk. If you would invest 2,214 in FIRST NATIONAL FIN on August 27, 2024 and sell it today you would earn a total of 746.00 from holding FIRST NATIONAL FIN or generate 33.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST NATIONAL FIN vs. Deutsche Pfandbriefbank AG
Performance |
| Timeline |
| FIRST NATIONAL FIN |
| Deutsche Pfandbriefbank |
FIRST NATIONAL and Deutsche Pfandbriefbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST NATIONAL and Deutsche Pfandbriefbank
The main advantage of trading using opposite FIRST NATIONAL and Deutsche Pfandbriefbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST NATIONAL position performs unexpectedly, Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank will offset losses from the drop in Deutsche Pfandbriefbank's long position.| FIRST NATIONAL vs. FUYO GENERAL LEASE | FIRST NATIONAL vs. JJ SNACK FOODS | FIRST NATIONAL vs. Air Lease | FIRST NATIONAL vs. KAUFMAN ET BROAD |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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