Correlation Between First IC and PSB Holdings
Can any of the company-specific risk be diversified away by investing in both First IC and PSB 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 IC and PSB Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First IC and PSB Holdings, you can compare the effects of market volatilities on First IC and PSB 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 IC with a short position of PSB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of First IC and PSB Holdings.
Diversification Opportunities for First IC and PSB Holdings
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and PSB is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding First IC and PSB Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSB Holdings and First IC 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 IC are associated (or correlated) with PSB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSB Holdings has no effect on the direction of First IC i.e., First IC and PSB Holdings go up and down completely randomly.
Pair Corralation between First IC and PSB Holdings
Given the investment horizon of 90 days First IC is expected to generate 8.66 times more return on investment than PSB Holdings. However, First IC is 8.66 times more volatile than PSB Holdings. It trades about 0.22 of its potential returns per unit of risk. PSB Holdings is currently generating about -0.2 per unit of risk. If you would invest 1,030 in First IC on January 8, 2025 and sell it today you would earn a total of 695.00 from holding First IC or generate 67.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
First IC vs. PSB Holdings
Performance |
| Timeline |
| First IC |
| PSB Holdings |
First IC and PSB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First IC and PSB Holdings
The main advantage of trading using opposite First IC and PSB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First IC position performs unexpectedly, PSB 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 PSB Holdings will offset losses from the drop in PSB Holdings' long position.| First IC vs. Banco Bradesco SA | First IC vs. Itau Unibanco Banco | First IC vs. Lloyds Banking Group | First IC vs. Deutsche Bank AG |
| PSB Holdings vs. Eagle Financial Services | PSB Holdings vs. National Capital Bank | PSB Holdings vs. Community Heritage Financial | PSB Holdings vs. Citizens Financial Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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