Correlation Between First State and Americann
Can any of the company-specific risk be diversified away by investing in both First State and Americann 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 State and Americann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First State Financial and Americann, you can compare the effects of market volatilities on First State and Americann 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 State with a short position of Americann. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and Americann.
Diversification Opportunities for First State and Americann
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Americann is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and Americann in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americann and First State 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 State Financial are associated (or correlated) with Americann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americann has no effect on the direction of First State i.e., First State and Americann go up and down completely randomly.
Pair Corralation between First State and Americann
If you would invest 6.10 in Americann on September 3, 2024 and sell it today you would lose (4.00) from holding Americann or give up 65.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
First State Financial vs. Americann
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Americann |
First State and Americann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and Americann
The main advantage of trading using opposite First State and Americann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, Americann 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 Americann will offset losses from the drop in Americann's long position.| First State vs. First Interstate BancSystem | First State vs. First Financial Bankshares | First State vs. Independent Bank Group | First State vs. CVB Financial |
| Americann vs. Asia Pptys | Americann vs. Aztec Land Comb | Americann vs. Ambase Corp | Americann vs. Agritek Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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