Correlation Between FIRST SAVINGS and Hoist Finance
Can any of the company-specific risk be diversified away by investing in both FIRST SAVINGS and Hoist Finance 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 SAVINGS and Hoist Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SAVINGS FINL and Hoist Finance AB, you can compare the effects of market volatilities on FIRST SAVINGS and Hoist Finance 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 SAVINGS with a short position of Hoist Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SAVINGS and Hoist Finance.
Diversification Opportunities for FIRST SAVINGS and Hoist Finance
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FIRST and Hoist is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SAVINGS FINL and Hoist Finance AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoist Finance AB and FIRST SAVINGS 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 SAVINGS FINL are associated (or correlated) with Hoist Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoist Finance AB has no effect on the direction of FIRST SAVINGS i.e., FIRST SAVINGS and Hoist Finance go up and down completely randomly.
Pair Corralation between FIRST SAVINGS and Hoist Finance
Assuming the 90 days horizon FIRST SAVINGS is expected to generate 3.05 times less return on investment than Hoist Finance. But when comparing it to its historical volatility, FIRST SAVINGS FINL is 1.37 times less risky than Hoist Finance. It trades about 0.04 of its potential returns per unit of risk. Hoist Finance AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 274.00 in Hoist Finance AB on October 14, 2024 and sell it today you would earn a total of 561.00 from holding Hoist Finance AB or generate 204.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SAVINGS FINL vs. Hoist Finance AB
Performance |
| Timeline |
| FIRST SAVINGS FINL |
| Hoist Finance AB |
FIRST SAVINGS and Hoist Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SAVINGS and Hoist Finance
The main advantage of trading using opposite FIRST SAVINGS and Hoist Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SAVINGS position performs unexpectedly, Hoist Finance 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 Hoist Finance will offset losses from the drop in Hoist Finance's long position.| FIRST SAVINGS vs. Amkor Technology | FIRST SAVINGS vs. AAC TECHNOLOGHLDGADR | FIRST SAVINGS vs. GLG LIFE TECH | FIRST SAVINGS vs. Easy Software AG |
| Hoist Finance vs. FIRST SAVINGS FINL | Hoist Finance vs. NetSol Technologies | Hoist Finance vs. Digilife Technologies Limited | Hoist Finance vs. CHRYSALIS INVESTMENTS LTD |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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