Correlation Between FFD Financial and FFW
Can any of the company-specific risk be diversified away by investing in both FFD Financial and FFW 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 FFD Financial and FFW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FFD Financial Corp and FFW Corporation, you can compare the effects of market volatilities on FFD Financial and FFW 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 FFD Financial with a short position of FFW. Check out your portfolio center. Please also check ongoing floating volatility patterns of FFD Financial and FFW.
Diversification Opportunities for FFD Financial and FFW
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FFD and FFW is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding FFD Financial Corp and FFW Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FFW Corporation and FFD Financial 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 FFD Financial Corp are associated (or correlated) with FFW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FFW Corporation has no effect on the direction of FFD Financial i.e., FFD Financial and FFW go up and down completely randomly.
Pair Corralation between FFD Financial and FFW
If you would invest 3,950 in FFW Corporation on October 22, 2024 and sell it today you would earn a total of 50.00 from holding FFW Corporation or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.67% |
| Values | Daily Returns |
FFD Financial Corp vs. FFW Corp.
Performance |
| Timeline |
| FFD Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FFW Corporation |
FFD Financial and FFW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FFD Financial and FFW
The main advantage of trading using opposite FFD Financial and FFW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FFD Financial position performs unexpectedly, FFW 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 FFW will offset losses from the drop in FFW's long position.| FFD Financial vs. First Bancorp | FFD Financial vs. Triumph Financial | FFD Financial vs. Northeast Bancorp | FFD Financial vs. Greene County Bancorp |
| FFW vs. First Farmers Financial | FFW vs. Farmers Merchants Bancorp | FFW vs. Lakeland Financial | FFW vs. Eagle Financial Services |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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