Correlation Between First State and AULT Old
Can any of the company-specific risk be diversified away by investing in both First State and AULT Old 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 AULT Old 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 AULT Old, you can compare the effects of market volatilities on First State and AULT Old 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 AULT Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and AULT Old.
Diversification Opportunities for First State and AULT Old
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and AULT is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and AULT Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AULT Old 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 AULT Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AULT Old has no effect on the direction of First State i.e., First State and AULT Old go up and down completely randomly.
Pair Corralation between First State and AULT Old
If you would invest 21.00 in AULT Old on October 24, 2024 and sell it today you would earn a total of 0.00 from holding AULT Old or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First State Financial vs. AULT Old
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AULT Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First State and AULT Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and AULT Old
The main advantage of trading using opposite First State and AULT Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, AULT Old 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 AULT Old will offset losses from the drop in AULT Old's long position.| First State vs. First Interstate BancSystem | First State vs. First Financial Bankshares | First State vs. CVB Financial | First State vs. Eagle Bancorp Montana |
| AULT Old vs. Air Lease | AULT Old vs. Japan Tobacco ADR | AULT Old vs. Mesa Air Group | AULT Old vs. Delta Air Lines |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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