Correlation Between First Keystone and A2 Milk
Can any of the company-specific risk be diversified away by investing in both First Keystone and A2 Milk 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 Keystone and A2 Milk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Keystone Corp and The a2 Milk, you can compare the effects of market volatilities on First Keystone and A2 Milk 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 Keystone with a short position of A2 Milk. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Keystone and A2 Milk.
Diversification Opportunities for First Keystone and A2 Milk
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and ACOPF is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding First Keystone Corp and The a2 Milk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on a2 Milk and First Keystone 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 Keystone Corp are associated (or correlated) with A2 Milk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of a2 Milk has no effect on the direction of First Keystone i.e., First Keystone and A2 Milk go up and down completely randomly.
Pair Corralation between First Keystone and A2 Milk
Given the investment horizon of 90 days First Keystone Corp is expected to generate 0.5 times more return on investment than A2 Milk. However, First Keystone Corp is 1.99 times less risky than A2 Milk. It trades about 0.07 of its potential returns per unit of risk. The a2 Milk is currently generating about 0.02 per unit of risk. If you would invest 1,154 in First Keystone Corp on November 2, 2024 and sell it today you would earn a total of 226.00 from holding First Keystone Corp or generate 19.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Keystone Corp vs. The a2 Milk
Performance |
| Timeline |
| First Keystone Corp |
| a2 Milk |
First Keystone and A2 Milk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Keystone and A2 Milk
The main advantage of trading using opposite First Keystone and A2 Milk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Keystone position performs unexpectedly, A2 Milk 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 A2 Milk will offset losses from the drop in A2 Milk's long position.| First Keystone vs. Citizens Bancorp Investment | First Keystone vs. Greenville Federal Financial | First Keystone vs. Oak Ridge Financial | First Keystone vs. Main Street Financial |
| A2 Milk vs. Artisan Consumer Goods | A2 Milk vs. Altavoz Entertainment | A2 Milk vs. Avi Ltd ADR | A2 Milk vs. Aryzta AG PK |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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