Correlation Between Fidelity and First Keystone
Can any of the company-specific risk be diversified away by investing in both Fidelity and First Keystone 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 Fidelity and First Keystone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity DD Bancorp and First Keystone Corp, you can compare the effects of market volatilities on Fidelity and First Keystone 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 Fidelity with a short position of First Keystone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity and First Keystone.
Diversification Opportunities for Fidelity and First Keystone
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and First is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity DD Bancorp and First Keystone Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Keystone Corp and Fidelity 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 Fidelity DD Bancorp are associated (or correlated) with First Keystone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Keystone Corp has no effect on the direction of Fidelity i.e., Fidelity and First Keystone go up and down completely randomly.
Pair Corralation between Fidelity and First Keystone
Given the investment horizon of 90 days Fidelity DD Bancorp is expected to generate 0.49 times more return on investment than First Keystone. However, Fidelity DD Bancorp is 2.03 times less risky than First Keystone. It trades about 0.03 of its potential returns per unit of risk. First Keystone Corp is currently generating about 0.01 per unit of risk. If you would invest 4,422 in Fidelity DD Bancorp on August 26, 2024 and sell it today you would earn a total of 949.00 from holding Fidelity DD Bancorp or generate 21.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.35% |
| Values | Daily Returns |
Fidelity DD Bancorp vs. First Keystone Corp
Performance |
| Timeline |
| Fidelity DD Bancorp |
| First Keystone Corp |
Fidelity and First Keystone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity and First Keystone
The main advantage of trading using opposite Fidelity and First Keystone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity position performs unexpectedly, First Keystone 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 Keystone will offset losses from the drop in First Keystone's long position.| Fidelity vs. Chemung Financial Corp | Fidelity vs. Oak Valley Bancorp | Fidelity vs. First Community | Fidelity vs. National Bankshares |
| First Keystone vs. Citizens Bancorp Investment | First Keystone vs. Greenville Federal Financial | First Keystone vs. Oak Ridge Financial | First Keystone vs. Main Street Financial |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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