Correlation Between First National and Bce
Can any of the company-specific risk be diversified away by investing in both First National and Bce 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 Bce 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 Bce Inc Pref, you can compare the effects of market volatilities on First National and Bce 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 Bce. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and Bce.
Diversification Opportunities for First National and Bce
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Bce is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding First National Financial and Bce Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bce Inc Pref 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 Bce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bce Inc Pref has no effect on the direction of First National i.e., First National and Bce go up and down completely randomly.
Pair Corralation between First National and Bce
Assuming the 90 days trading horizon First National Financial is expected to generate 1.61 times more return on investment than Bce. However, First National is 1.61 times more volatile than Bce Inc Pref. It trades about 0.07 of its potential returns per unit of risk. Bce Inc Pref is currently generating about 0.02 per unit of risk. If you would invest 1,146 in First National Financial on September 14, 2024 and sell it today you would earn a total of 399.00 from holding First National Financial or generate 34.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First National Financial vs. Bce Inc Pref
Performance |
| Timeline |
| First National Financial |
| Bce Inc Pref |
First National and Bce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First National and Bce
The main advantage of trading using opposite First National and Bce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First National position performs unexpectedly, Bce 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 Bce will offset losses from the drop in Bce's long position.| First National vs. Economic Investment Trust | First National vs. Stampede Drilling | First National vs. Altair Resources | First National vs. Pembina Pipeline Corp |
| Bce vs. Brookfield Office Properties | Bce vs. Royal Bank of | Bce vs. Gfl Environmental Holdings | Bce vs. North American Construction |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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