Correlation Between Equitable and First National
Can any of the company-specific risk be diversified away by investing in both Equitable 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 Equitable and First National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equitable Group and First National Financial, you can compare the effects of market volatilities on Equitable 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 Equitable with a short position of First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equitable and First National.
Diversification Opportunities for Equitable and First National
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Equitable and First is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Equitable Group 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 Equitable 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 Equitable Group 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 Equitable i.e., Equitable and First National go up and down completely randomly.
Pair Corralation between Equitable and First National
Assuming the 90 days trading horizon Equitable is expected to generate 3.38 times less return on investment than First National. In addition to that, Equitable is 1.1 times more volatile than First National Financial. It trades about 0.13 of its total potential returns per unit of risk. First National Financial is currently generating about 0.49 per unit of volatility. If you would invest 4,012 in First National Financial on August 25, 2024 and sell it today you would earn a total of 441.00 from holding First National Financial or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Equitable Group vs. First National Financial
Performance |
| Timeline |
| Equitable Group |
| First National Financial |
Equitable and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equitable and First National
The main advantage of trading using opposite Equitable and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equitable 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.| Equitable vs. goeasy | Equitable vs. Canadian Western Bank | Equitable vs. TFI International | Equitable vs. Intact Financial |
| First National vs. Exchange Income | First National vs. Atrium Mortgage Investment | First National vs. Equitable Group | First National vs. Timbercreek Financial Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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