Correlation Between First National and China Intel
Can any of the company-specific risk be diversified away by investing in both First National and China Intel 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 China Intel 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 China Intel Info, you can compare the effects of market volatilities on First National and China Intel 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 China Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and China Intel.
Diversification Opportunities for First National and China Intel
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and China is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding First National Energy and China Intel Info in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Intel Info 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 China Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Intel Info has no effect on the direction of First National i.e., First National and China Intel go up and down completely randomly.
Pair Corralation between First National and China Intel
Given the investment horizon of 90 days First National Energy is expected to generate 2.62 times more return on investment than China Intel. However, First National is 2.62 times more volatile than China Intel Info. It trades about 0.2 of its potential returns per unit of risk. China Intel Info is currently generating about 0.07 per unit of risk. If you would invest 5.00 in First National Energy on September 12, 2024 and sell it today you would earn a total of 4.06 from holding First National Energy or generate 81.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
First National Energy vs. China Intel Info
Performance |
| Timeline |
| First National Energy |
| China Intel Info |
First National and China Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First National and China Intel
The main advantage of trading using opposite First National and China Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First National position performs unexpectedly, China Intel 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 China Intel will offset losses from the drop in China Intel's long position.| First National vs. Kontrol Technologies Corp | First National vs. PwrCor Inc | First National vs. 808 Renewable Energy | First National vs. Boralex |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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