Correlation Between Flexible Solutions and First Horizon
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions and First Horizon 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 Flexible Solutions and First Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and First Horizon, you can compare the effects of market volatilities on Flexible Solutions and First Horizon 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 Flexible Solutions with a short position of First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and First Horizon.
Diversification Opportunities for Flexible Solutions and First Horizon
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flexible and First is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and First Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon and Flexible Solutions 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 Flexible Solutions International are associated (or correlated) with First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and First Horizon go up and down completely randomly.
Pair Corralation between Flexible Solutions and First Horizon
Considering the 90-day investment horizon Flexible Solutions International is expected to generate 9.34 times more return on investment than First Horizon. However, Flexible Solutions is 9.34 times more volatile than First Horizon. It trades about 0.14 of its potential returns per unit of risk. First Horizon is currently generating about 0.06 per unit of risk. If you would invest 218.00 in Flexible Solutions International on September 1, 2024 and sell it today you would earn a total of 197.00 from holding Flexible Solutions International or generate 90.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Flexible Solutions Internation vs. First Horizon
Performance |
| Timeline |
| Flexible Solutions |
| First Horizon |
Flexible Solutions and First Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and First Horizon
The main advantage of trading using opposite Flexible Solutions and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
| First Horizon vs. Fifth Third Bancorp | First Horizon vs. Fifth Third Bancorp | First Horizon vs. First Citizens BancShares | First Horizon vs. Huntington Bancshares Incorporated |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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