Correlation Between Element Fleet and First National
Can any of the company-specific risk be diversified away by investing in both Element Fleet and First National 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 Element Fleet and First National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Element Fleet Management and First National Financial, you can compare the effects of market volatilities on Element Fleet and First National 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 Element Fleet with a short position of First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Element Fleet and First National.
Diversification Opportunities for Element Fleet and First National
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Element and First is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Element Fleet Management and First National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Financial and Element Fleet 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 Element Fleet Management are associated (or correlated) with First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Financial has no effect on the direction of Element Fleet i.e., Element Fleet and First National go up and down completely randomly.
Pair Corralation between Element Fleet and First National
Assuming the 90 days trading horizon Element Fleet is expected to generate 1.54 times less return on investment than First National. But when comparing it to its historical volatility, Element Fleet Management is 1.34 times less risky than First National. It trades about 0.05 of its potential returns per unit of risk. First National Financial is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,430 in First National Financial on November 2, 2024 and sell it today you would earn a total of 110.00 from holding First National Financial or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Element Fleet Management vs. First National Financial
Performance |
| Timeline |
| Element Fleet Management |
| First National Financial |
Element Fleet and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Element Fleet and First National
The main advantage of trading using opposite Element Fleet and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Element Fleet position performs unexpectedly, First National 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 First National will offset losses from the drop in First National's long position.| Element Fleet vs. ECN Capital Corp | Element Fleet vs. Martinrea International | Element Fleet vs. CCL Industries | Element Fleet vs. FirstService Corp |
| First National vs. CI Financial Corp | First National vs. Constellation Software | First National vs. Canso Credit Trust | First National vs. Sparx Technology |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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