Correlation Between First State and First Acceptance
Can any of the company-specific risk be diversified away by investing in both First State and First Acceptance 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 First Acceptance 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 First Acceptance Corp, you can compare the effects of market volatilities on First State and First Acceptance 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 First Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and First Acceptance.
Diversification Opportunities for First State and First Acceptance
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and First is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and First Acceptance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Acceptance Corp 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 First Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Acceptance Corp has no effect on the direction of First State i.e., First State and First Acceptance go up and down completely randomly.
Pair Corralation between First State and First Acceptance
Given the investment horizon of 90 days First State Financial is expected to generate 8.07 times more return on investment than First Acceptance. However, First State is 8.07 times more volatile than First Acceptance Corp. It trades about 0.06 of its potential returns per unit of risk. First Acceptance Corp is currently generating about 0.1 per unit of risk. If you would invest 3.88 in First State Financial on November 4, 2025 and sell it today you would lose (1.78) from holding First State Financial or give up 45.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
First State Financial vs. First Acceptance Corp
Performance |
| Timeline |
| First State Financial |
| First Acceptance Corp |
First State and First Acceptance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and First Acceptance
The main advantage of trading using opposite First State and First Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, First Acceptance 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 Acceptance will offset losses from the drop in First Acceptance's long position.| First State vs. First Republic Bank | First State vs. BioCube | First State vs. Trend Exploration I | First State vs. Eastern Goldfields |
| First Acceptance vs. Bank Utica Ny | First Acceptance vs. Stack Capital Group | First Acceptance vs. ENB Financial Corp | First Acceptance vs. CBB Bancorp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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