Correlation Between First Horizon and Mauch Chunk
Can any of the company-specific risk be diversified away by investing in both First Horizon and Mauch Chunk 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 Horizon and Mauch Chunk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Horizon National and Mauch Chunk Trust, you can compare the effects of market volatilities on First Horizon and Mauch Chunk 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 Horizon with a short position of Mauch Chunk. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Horizon and Mauch Chunk.
Diversification Opportunities for First Horizon and Mauch Chunk
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Mauch is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding First Horizon National and Mauch Chunk Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mauch Chunk Trust and First Horizon 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 Horizon National are associated (or correlated) with Mauch Chunk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mauch Chunk Trust has no effect on the direction of First Horizon i.e., First Horizon and Mauch Chunk go up and down completely randomly.
Pair Corralation between First Horizon and Mauch Chunk
Considering the 90-day investment horizon First Horizon National is expected to generate 0.58 times more return on investment than Mauch Chunk. However, First Horizon National is 1.72 times less risky than Mauch Chunk. It trades about 0.28 of its potential returns per unit of risk. Mauch Chunk Trust is currently generating about -0.12 per unit of risk. If you would invest 2,065 in First Horizon National on November 9, 2024 and sell it today you would earn a total of 174.00 from holding First Horizon National or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Horizon National vs. Mauch Chunk Trust
Performance |
| Timeline |
| First Horizon National |
| Mauch Chunk Trust |
First Horizon and Mauch Chunk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Horizon and Mauch Chunk
The main advantage of trading using opposite First Horizon and Mauch Chunk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Horizon position performs unexpectedly, Mauch Chunk 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 Mauch Chunk will offset losses from the drop in Mauch Chunk's long position.| First Horizon vs. Zions Bancorporation | First Horizon vs. KeyCorp | First Horizon vs. Comerica | First Horizon vs. Western Alliance Bancorporation |
| Mauch Chunk vs. Western Alliance Bancorporation | Mauch Chunk vs. Zions Bancorporation | Mauch Chunk vs. KeyCorp | Mauch Chunk vs. First Horizon National |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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