Correlation Between FIRST SAVINGS and Universal Technical
Can any of the company-specific risk be diversified away by investing in both FIRST SAVINGS and Universal Technical 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 Universal Technical 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 Universal Technical Institute, you can compare the effects of market volatilities on FIRST SAVINGS and Universal Technical 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 Universal Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SAVINGS and Universal Technical.
Diversification Opportunities for FIRST SAVINGS and Universal Technical
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FIRST and Universal is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SAVINGS FINL and Universal Technical Institute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Technical 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 Universal Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Technical has no effect on the direction of FIRST SAVINGS i.e., FIRST SAVINGS and Universal Technical go up and down completely randomly.
Pair Corralation between FIRST SAVINGS and Universal Technical
Assuming the 90 days horizon FIRST SAVINGS FINL is expected to generate 0.95 times more return on investment than Universal Technical. However, FIRST SAVINGS FINL is 1.05 times less risky than Universal Technical. It trades about 0.1 of its potential returns per unit of risk. Universal Technical Institute is currently generating about -0.08 per unit of risk. If you would invest 2,200 in FIRST SAVINGS FINL on October 25, 2024 and sell it today you would earn a total of 80.00 from holding FIRST SAVINGS FINL or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SAVINGS FINL vs. Universal Technical Institute
Performance |
| Timeline |
| FIRST SAVINGS FINL |
| Universal Technical |
FIRST SAVINGS and Universal Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SAVINGS and Universal Technical
The main advantage of trading using opposite FIRST SAVINGS and Universal Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SAVINGS position performs unexpectedly, Universal Technical 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 Universal Technical will offset losses from the drop in Universal Technical's long position.| FIRST SAVINGS vs. Laureate Education | FIRST SAVINGS vs. Amkor Technology | FIRST SAVINGS vs. EEDUCATION ALBERT AB | FIRST SAVINGS vs. Allegheny Technologies Incorporated |
| Universal Technical vs. Cal Maine Foods | Universal Technical vs. PATTIES FOODS | Universal Technical vs. Tyson Foods | Universal Technical vs. Nomad Foods |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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