Correlation Between First State and Scepter Holdings
Can any of the company-specific risk be diversified away by investing in both First State and Scepter Holdings 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 Scepter Holdings 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 Scepter Holdings, you can compare the effects of market volatilities on First State and Scepter Holdings 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 Scepter Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and Scepter Holdings.
Diversification Opportunities for First State and Scepter Holdings
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Scepter is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and Scepter Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scepter Holdings 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 Scepter Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scepter Holdings has no effect on the direction of First State i.e., First State and Scepter Holdings go up and down completely randomly.
Pair Corralation between First State and Scepter Holdings
If you would invest 4.47 in First State Financial on November 3, 2024 and sell it today you would earn a total of 0.00 from holding First State Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
First State Financial vs. Scepter Holdings
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Scepter Holdings |
First State and Scepter Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and Scepter Holdings
The main advantage of trading using opposite First State and Scepter Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, Scepter Holdings 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 Scepter Holdings will offset losses from the drop in Scepter Holdings' 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 |
| Scepter Holdings vs. Qed Connect | Scepter Holdings vs. Nates Food Co | Scepter Holdings vs. Sharing Services Global | Scepter Holdings vs. Stryve Foods |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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