Correlation Between FIRST SAVINGS and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both FIRST SAVINGS and Advanced Medical 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 Advanced Medical 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 Advanced Medical Solutions, you can compare the effects of market volatilities on FIRST SAVINGS and Advanced Medical 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 Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SAVINGS and Advanced Medical.
Diversification Opportunities for FIRST SAVINGS and Advanced Medical
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FIRST and Advanced is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SAVINGS FINL and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of FIRST SAVINGS i.e., FIRST SAVINGS and Advanced Medical go up and down completely randomly.
Pair Corralation between FIRST SAVINGS and Advanced Medical
Assuming the 90 days horizon FIRST SAVINGS FINL is expected to generate 0.91 times more return on investment than Advanced Medical. However, FIRST SAVINGS FINL is 1.1 times less risky than Advanced Medical. It trades about -0.11 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about -0.21 per unit of risk. If you would invest 2,505 in FIRST SAVINGS FINL on October 13, 2024 and sell it today you would lose (145.00) from holding FIRST SAVINGS FINL or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SAVINGS FINL vs. Advanced Medical Solutions
Performance |
| Timeline |
| FIRST SAVINGS FINL |
| Advanced Medical Sol |
FIRST SAVINGS and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SAVINGS and Advanced Medical
The main advantage of trading using opposite FIRST SAVINGS and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SAVINGS position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.| FIRST SAVINGS vs. CITY OFFICE REIT | FIRST SAVINGS vs. Aedas Homes SA | FIRST SAVINGS vs. Diamyd Medical AB | FIRST SAVINGS vs. Neinor Homes SA |
| Advanced Medical vs. FIREWEED METALS P | Advanced Medical vs. FIRST SAVINGS FINL | Advanced Medical vs. Guangdong Investment Limited | Advanced Medical vs. GRIFFIN MINING 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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