Correlation Between First National and Green Impact
Can any of the company-specific risk be diversified away by investing in both First National and Green Impact 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 Green Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First National Energy and Green Impact Partners, you can compare the effects of market volatilities on First National and Green Impact 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 Green Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and Green Impact.
Diversification Opportunities for First National and Green Impact
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Green is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding First National Energy and Green Impact Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Impact Partners 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 Energy are associated (or correlated) with Green Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Impact Partners has no effect on the direction of First National i.e., First National and Green Impact go up and down completely randomly.
Pair Corralation between First National and Green Impact
Given the investment horizon of 90 days First National Energy is expected to generate 23.81 times more return on investment than Green Impact. However, First National is 23.81 times more volatile than Green Impact Partners. It trades about 0.09 of its potential returns per unit of risk. Green Impact Partners is currently generating about 0.01 per unit of risk. If you would invest 55.00 in First National Energy on September 4, 2024 and sell it today you would lose (45.94) from holding First National Energy or give up 83.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First National Energy vs. Green Impact Partners
Performance |
| Timeline |
| First National Energy |
| Green Impact Partners |
First National and Green Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First National and Green Impact
The main advantage of trading using opposite First National and Green Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First National position performs unexpectedly, Green Impact 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 Green Impact will offset losses from the drop in Green Impact's long position.| First National vs. Energy of Minas | First National vs. The AES | First National vs. Sempra Energy | First National vs. Iberdrola SA |
| Green Impact vs. Alternus Energy Group | Green Impact vs. First National Energy | Green Impact vs. Tokyo Electric Power | Green Impact vs. Clearway Energy Class |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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