Correlation Between First National and Alaska Energy
Can any of the company-specific risk be diversified away by investing in both First National and Alaska Energy 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 National and Alaska Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First National Financial and Alaska Energy Metals, you can compare the effects of market volatilities on First National and Alaska Energy 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 National with a short position of Alaska Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and Alaska Energy.
Diversification Opportunities for First National and Alaska Energy
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Alaska is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding First National Financial and Alaska Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Energy Metals and First National 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 National Financial are associated (or correlated) with Alaska Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Energy Metals has no effect on the direction of First National i.e., First National and Alaska Energy go up and down completely randomly.
Pair Corralation between First National and Alaska Energy
Assuming the 90 days trading horizon First National Financial is expected to generate 0.45 times more return on investment than Alaska Energy. However, First National Financial is 2.21 times less risky than Alaska Energy. It trades about 0.08 of its potential returns per unit of risk. Alaska Energy Metals is currently generating about 0.02 per unit of risk. If you would invest 1,500 in First National Financial on October 20, 2024 and sell it today you would earn a total of 40.00 from holding First National Financial or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First National Financial vs. Alaska Energy Metals
Performance |
| Timeline |
| First National Financial |
| Alaska Energy Metals |
First National and Alaska Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First National and Alaska Energy
The main advantage of trading using opposite First National and Alaska Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First National position performs unexpectedly, Alaska Energy 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 Alaska Energy will offset losses from the drop in Alaska Energy's long position.| First National vs. TUT Fitness Group | First National vs. WELL Health Technologies | First National vs. Element Fleet Management | First National vs. DRI Healthcare Trust |
| Alaska Energy vs. Verizon Communications CDR | Alaska Energy vs. Hemisphere Energy | Alaska Energy vs. Canaf Investments | Alaska Energy vs. Diversified Royalty 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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