Correlation Between FIRST NATIONAL and LendingTree
Can any of the company-specific risk be diversified away by investing in both FIRST NATIONAL and LendingTree 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 LendingTree 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 LendingTree, you can compare the effects of market volatilities on FIRST NATIONAL and LendingTree 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 LendingTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST NATIONAL and LendingTree.
Diversification Opportunities for FIRST NATIONAL and LendingTree
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FIRST and LendingTree is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding FIRST NATIONAL FIN and LendingTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingTree 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 LendingTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LendingTree has no effect on the direction of FIRST NATIONAL i.e., FIRST NATIONAL and LendingTree go up and down completely randomly.
Pair Corralation between FIRST NATIONAL and LendingTree
Assuming the 90 days horizon FIRST NATIONAL is expected to generate 2.56 times less return on investment than LendingTree. But when comparing it to its historical volatility, FIRST NATIONAL FIN is 2.35 times less risky than LendingTree. It trades about 0.05 of its potential returns per unit of risk. LendingTree is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,026 in LendingTree on August 30, 2024 and sell it today you would earn a total of 2,150 from holding LendingTree or generate 106.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST NATIONAL FIN vs. LendingTree
Performance |
| Timeline |
| FIRST NATIONAL FIN |
| LendingTree |
FIRST NATIONAL and LendingTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST NATIONAL and LendingTree
The main advantage of trading using opposite FIRST NATIONAL and LendingTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST NATIONAL position performs unexpectedly, LendingTree 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 LendingTree will offset losses from the drop in LendingTree's long position.| FIRST NATIONAL vs. Superior Plus Corp | FIRST NATIONAL vs. NMI Holdings | FIRST NATIONAL vs. SIVERS SEMICONDUCTORS AB | FIRST NATIONAL vs. Talanx AG |
| LendingTree vs. DATANG INTL POW | LendingTree vs. NTT DATA | LendingTree vs. Sumitomo Mitsui Construction | LendingTree vs. North American Construction |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |