Correlation Between First Hawaiian and National Bank
Can any of the company-specific risk be diversified away by investing in both First Hawaiian and National Bank 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 National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hawaiian and National Bank of, you can compare the effects of market volatilities on First Hawaiian and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hawaiian and National Bank.
Diversification Opportunities for First Hawaiian and National Bank
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and National is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding First Hawaiian and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of First Hawaiian i.e., First Hawaiian and National Bank go up and down completely randomly.
Pair Corralation between First Hawaiian and National Bank
Considering the 90-day investment horizon First Hawaiian is expected to generate 0.63 times more return on investment than National Bank. However, First Hawaiian is 1.58 times less risky than National Bank. It trades about 0.08 of its potential returns per unit of risk. National Bank of is currently generating about 0.03 per unit of risk. If you would invest 2,016 in First Hawaiian on September 4, 2024 and sell it today you would earn a total of 724.00 from holding First Hawaiian or generate 35.91% 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. National Bank of
Performance |
| Timeline |
| First Hawaiian |
| National Bank |
First Hawaiian and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hawaiian and National Bank
The main advantage of trading using opposite First Hawaiian and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hawaiian position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
| National Bank vs. Alpha Bank SA | National Bank vs. Eurobank Ergasias SA | National Bank vs. Piraeus Bank SA | National Bank vs. PT Bank Central |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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