Correlation Between First National and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both First National and Aozora Bank 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 National and Aozora Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First National Bank and Aozora Bank, you can compare the effects of market volatilities on First National and Aozora Bank 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 National with a short position of Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and Aozora Bank.
Diversification Opportunities for First National and Aozora Bank
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Aozora is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding First National Bank and Aozora Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank and First National 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 National Bank are associated (or correlated) with Aozora Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aozora Bank has no effect on the direction of First National i.e., First National and Aozora Bank go up and down completely randomly.
Pair Corralation between First National and Aozora Bank
If you would invest 17,894 in First National Bank on September 14, 2024 and sell it today you would earn a total of 5,106 from holding First National Bank or generate 28.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.37% |
| Values | Daily Returns |
First National Bank vs. Aozora Bank
Performance |
| Timeline |
| First National Bank |
| Aozora Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First National and Aozora Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First National and Aozora Bank
The main advantage of trading using opposite First National and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First National position performs unexpectedly, Aozora Bank 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 Aozora Bank will offset losses from the drop in Aozora Bank's long position.| First National vs. IF Bancorp | First National vs. LINKBANCORP | First National vs. Pathfinder Bancorp | First National vs. First Keystone Corp |
| Aozora Bank vs. Brenmiller Energy Ltd | Aozora Bank vs. Patterson UTI Energy | Aozora Bank vs. Precision Drilling | Aozora Bank vs. Nabors Industries |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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