Correlation Between FirstCash and Nicholas Financial
Can any of the company-specific risk be diversified away by investing in both FirstCash and Nicholas Financial 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 FirstCash and Nicholas Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstCash and Nicholas Financial, you can compare the effects of market volatilities on FirstCash and Nicholas Financial 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 FirstCash with a short position of Nicholas Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstCash and Nicholas Financial.
Diversification Opportunities for FirstCash and Nicholas Financial
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FirstCash and Nicholas is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash and Nicholas Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Financial and FirstCash 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 FirstCash are associated (or correlated) with Nicholas Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Financial has no effect on the direction of FirstCash i.e., FirstCash and Nicholas Financial go up and down completely randomly.
Pair Corralation between FirstCash and Nicholas Financial
Given the investment horizon of 90 days FirstCash is expected to generate 0.51 times more return on investment than Nicholas Financial. However, FirstCash is 1.98 times less risky than Nicholas Financial. It trades about 0.03 of its potential returns per unit of risk. Nicholas Financial is currently generating about 0.01 per unit of risk. If you would invest 8,869 in FirstCash on August 30, 2024 and sell it today you would earn a total of 1,998 from holding FirstCash or generate 22.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.13% |
| Values | Daily Returns |
FirstCash vs. Nicholas Financial
Performance |
| Timeline |
| FirstCash |
| Nicholas Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
FirstCash and Nicholas Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstCash and Nicholas Financial
The main advantage of trading using opposite FirstCash and Nicholas Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstCash position performs unexpectedly, Nicholas Financial 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 Nicholas Financial will offset losses from the drop in Nicholas Financial's long position.| FirstCash vs. 360 Finance | FirstCash vs. Atlanticus Holdings | FirstCash vs. X Financial Class | FirstCash vs. Yirendai |
| Nicholas Financial vs. Regional Management Corp | Nicholas Financial vs. Orix Corp Ads | Nicholas Financial vs. FirstCash | Nicholas Financial vs. Finance of America |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |