Correlation Between First State and CIRCOR International
Can any of the company-specific risk be diversified away by investing in both First State and CIRCOR International 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 CIRCOR International 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 CIRCOR International, you can compare the effects of market volatilities on First State and CIRCOR International 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 CIRCOR International. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and CIRCOR International.
Diversification Opportunities for First State and CIRCOR International
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and CIRCOR is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and CIRCOR International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIRCOR International 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 CIRCOR International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIRCOR International has no effect on the direction of First State i.e., First State and CIRCOR International go up and down completely randomly.
Pair Corralation between First State and CIRCOR International
If you would invest 4.47 in First State Financial on September 12, 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 Together |
| Strength | Strong |
| Accuracy | 75.0% |
| Values | Daily Returns |
First State Financial vs. CIRCOR International
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CIRCOR International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First State and CIRCOR International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and CIRCOR International
The main advantage of trading using opposite First State and CIRCOR International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, CIRCOR International 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 CIRCOR International will offset losses from the drop in CIRCOR International'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 |
| CIRCOR International vs. Helios Technologies | CIRCOR International vs. Enpro Industries | CIRCOR International vs. Omega Flex | CIRCOR International vs. Luxfer Holdings PLC |
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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