Correlation Between First Hawaiian and Permanent TSB
Can any of the company-specific risk be diversified away by investing in both First Hawaiian and Permanent TSB 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 Permanent TSB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hawaiian and Permanent TSB Group, you can compare the effects of market volatilities on First Hawaiian and Permanent TSB 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 Permanent TSB. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hawaiian and Permanent TSB.
Diversification Opportunities for First Hawaiian and Permanent TSB
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Permanent is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding First Hawaiian and Permanent TSB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permanent TSB Group 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 Permanent TSB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permanent TSB Group has no effect on the direction of First Hawaiian i.e., First Hawaiian and Permanent TSB go up and down completely randomly.
Pair Corralation between First Hawaiian and Permanent TSB
Considering the 90-day investment horizon First Hawaiian is expected to generate 0.76 times more return on investment than Permanent TSB. However, First Hawaiian is 1.32 times less risky than Permanent TSB. It trades about 0.1 of its potential returns per unit of risk. Permanent TSB Group is currently generating about -0.03 per unit of risk. If you would invest 1,724 in First Hawaiian on September 4, 2024 and sell it today you would earn a total of 1,016 from holding First Hawaiian or generate 58.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Hawaiian vs. Permanent TSB Group
Performance |
| Timeline |
| First Hawaiian |
| Permanent TSB Group |
First Hawaiian and Permanent TSB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hawaiian and Permanent TSB
The main advantage of trading using opposite First Hawaiian and Permanent TSB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hawaiian position performs unexpectedly, Permanent TSB 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 Permanent TSB will offset losses from the drop in Permanent TSB's long position.| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
| Permanent TSB vs. Japan Post Holdings | Permanent TSB vs. Commercial International Bank | Permanent TSB vs. Kasikornbank Public Co | Permanent TSB vs. China Merchants Bank |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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