Correlation Between First National and Goodfood Market
Can any of the company-specific risk be diversified away by investing in both First National and Goodfood Market 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 Goodfood Market 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 Goodfood Market Corp, you can compare the effects of market volatilities on First National and Goodfood Market 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 Goodfood Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and Goodfood Market.
Diversification Opportunities for First National and Goodfood Market
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Goodfood is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding First National Financial and Goodfood Market Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodfood Market Corp 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 Goodfood Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodfood Market Corp has no effect on the direction of First National i.e., First National and Goodfood Market go up and down completely randomly.
Pair Corralation between First National and Goodfood Market
Assuming the 90 days trading horizon First National Financial is expected to generate 0.26 times more return on investment than Goodfood Market. However, First National Financial is 3.92 times less risky than Goodfood Market. It trades about 0.07 of its potential returns per unit of risk. Goodfood Market Corp 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First National Financial vs. Goodfood Market Corp
Performance |
| Timeline |
| First National Financial |
| Goodfood Market Corp |
First National and Goodfood Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First National and Goodfood Market
The main advantage of trading using opposite First National and Goodfood Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First National position performs unexpectedly, Goodfood Market 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 Goodfood Market will offset losses from the drop in Goodfood Market'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 |
| Goodfood Market vs. WELL Health Technologies | Goodfood Market vs. Lightspeed Commerce | Goodfood Market vs. iShares Canadian HYBrid | Goodfood Market vs. Altagas Cum Red |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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