Correlation Between First National and Pollard Banknote
Can any of the company-specific risk be diversified away by investing in both First National and Pollard Banknote 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 Pollard Banknote 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 Pollard Banknote Limited, you can compare the effects of market volatilities on First National and Pollard Banknote 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 Pollard Banknote. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and Pollard Banknote.
Diversification Opportunities for First National and Pollard Banknote
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Pollard is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding First National Financial and Pollard Banknote Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pollard Banknote 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 Pollard Banknote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pollard Banknote has no effect on the direction of First National i.e., First National and Pollard Banknote go up and down completely randomly.
Pair Corralation between First National and Pollard Banknote
Assuming the 90 days trading horizon First National Financial is expected to generate 0.22 times more return on investment than Pollard Banknote. However, First National Financial is 4.57 times less risky than Pollard Banknote. It trades about 0.03 of its potential returns per unit of risk. Pollard Banknote Limited is currently generating about -0.02 per unit of risk. If you would invest 1,428 in First National Financial on September 3, 2024 and sell it today you would earn a total of 52.00 from holding First National Financial or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First National Financial vs. Pollard Banknote Limited
Performance |
| Timeline |
| First National Financial |
| Pollard Banknote |
First National and Pollard Banknote Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First National and Pollard Banknote
The main advantage of trading using opposite First National and Pollard Banknote positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First National position performs unexpectedly, Pollard Banknote 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 Pollard Banknote will offset losses from the drop in Pollard Banknote's long position.| First National vs. Apple Inc CDR | First National vs. Microsoft Corp CDR | First National vs. Amazon CDR | First National vs. Alphabet Inc CDR |
| Pollard Banknote vs. TFI International | Pollard Banknote vs. Baylin Technologies | Pollard Banknote vs. Information Services |
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..
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |