Correlation Between First Hawaiian and FineMark Holdings
Can any of the company-specific risk be diversified away by investing in both First Hawaiian and FineMark Holdings 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 Hawaiian and FineMark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hawaiian and FineMark Holdings, you can compare the effects of market volatilities on First Hawaiian and FineMark Holdings 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 Hawaiian with a short position of FineMark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hawaiian and FineMark Holdings.
Diversification Opportunities for First Hawaiian and FineMark Holdings
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and FineMark is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding First Hawaiian and FineMark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FineMark Holdings and First Hawaiian 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 Hawaiian are associated (or correlated) with FineMark Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FineMark Holdings has no effect on the direction of First Hawaiian i.e., First Hawaiian and FineMark Holdings go up and down completely randomly.
Pair Corralation between First Hawaiian and FineMark Holdings
Considering the 90-day investment horizon First Hawaiian is expected to generate 8.89 times more return on investment than FineMark Holdings. However, First Hawaiian is 8.89 times more volatile than FineMark Holdings. It trades about 0.18 of its potential returns per unit of risk. FineMark Holdings is currently generating about 0.18 per unit of risk. If you would invest 2,479 in First Hawaiian on September 4, 2024 and sell it today you would earn a total of 261.00 from holding First Hawaiian or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
First Hawaiian vs. FineMark Holdings
Performance |
| Timeline |
| First Hawaiian |
| FineMark Holdings |
First Hawaiian and FineMark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hawaiian and FineMark Holdings
The main advantage of trading using opposite First Hawaiian and FineMark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hawaiian position performs unexpectedly, FineMark Holdings 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 FineMark Holdings will offset losses from the drop in FineMark Holdings' long position.| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
| FineMark Holdings vs. First Hawaiian | FineMark Holdings vs. Central Pacific Financial | FineMark Holdings vs. Territorial Bancorp | FineMark Holdings vs. Comerica |
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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