Correlation Between First State and First Robinson
Can any of the company-specific risk be diversified away by investing in both First State and First Robinson 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 Robinson 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 Robinson Financial, you can compare the effects of market volatilities on First State and First Robinson 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 Robinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and First Robinson.
Diversification Opportunities for First State and First Robinson
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and First is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and First Robinson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Robinson Financial 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 Robinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Robinson Financial has no effect on the direction of First State i.e., First State and First Robinson go up and down completely randomly.
Pair Corralation between First State and First Robinson
Given the investment horizon of 90 days First State Financial is expected to generate 15.99 times more return on investment than First Robinson. However, First State is 15.99 times more volatile than First Robinson Financial. It trades about 0.06 of its potential returns per unit of risk. First Robinson Financial is currently generating about 0.23 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First State Financial vs. First Robinson Financial
Performance |
| Timeline |
| First State Financial |
| First Robinson Financial |
First State and First Robinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and First Robinson
The main advantage of trading using opposite First State and First Robinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, First Robinson 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 Robinson will offset losses from the drop in First Robinson'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 Robinson vs. Commercial National Financial | First Robinson vs. Lakeside Bancshares | First Robinson vs. Apollo Bancorp | First Robinson vs. Pennfed Financial Services |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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