Correlation Between FNB and First Reliance
Can any of the company-specific risk be diversified away by investing in both FNB and First Reliance 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 FNB and First Reliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FNB Inc and First Reliance Bancshares, you can compare the effects of market volatilities on FNB and First Reliance 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 FNB with a short position of First Reliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNB and First Reliance.
Diversification Opportunities for FNB and First Reliance
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FNB and First is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding FNB Inc and First Reliance Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Reliance Bancshares and FNB 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 FNB Inc are associated (or correlated) with First Reliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Reliance Bancshares has no effect on the direction of FNB i.e., FNB and First Reliance go up and down completely randomly.
Pair Corralation between FNB and First Reliance
Given the investment horizon of 90 days FNB Inc is expected to generate 1.0 times more return on investment than First Reliance. However, FNB Inc is as risky as First Reliance. It trades about 0.21 of its potential returns per unit of risk. First Reliance Bancshares is currently generating about -0.11 per unit of risk. If you would invest 2,410 in FNB Inc on August 30, 2024 and sell it today you would earn a total of 90.00 from holding FNB Inc or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNB Inc vs. First Reliance Bancshares
Performance |
| Timeline |
| FNB Inc |
| First Reliance Bancshares |
FNB and First Reliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNB and First Reliance
The main advantage of trading using opposite FNB and First Reliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNB position performs unexpectedly, First Reliance 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 First Reliance will offset losses from the drop in First Reliance's long position.| FNB vs. Century Financial Corp | FNB vs. Apollo Bancorp | FNB vs. Commercial National Financial | FNB vs. Eastern Michigan Financial |
| First Reliance vs. Israel Discount Bank | First Reliance vs. Baraboo Bancorporation | First Reliance vs. Danske Bank AS | First Reliance vs. Jyske Bank AS |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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