Correlation Between First State and Pinelawn Cemetery
Can any of the company-specific risk be diversified away by investing in both First State and Pinelawn Cemetery 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 Pinelawn Cemetery 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 Pinelawn Cemetery, you can compare the effects of market volatilities on First State and Pinelawn Cemetery 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 Pinelawn Cemetery. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and Pinelawn Cemetery.
Diversification Opportunities for First State and Pinelawn Cemetery
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Pinelawn is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and Pinelawn Cemetery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinelawn Cemetery 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 Pinelawn Cemetery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinelawn Cemetery has no effect on the direction of First State i.e., First State and Pinelawn Cemetery go up and down completely randomly.
Pair Corralation between First State and Pinelawn Cemetery
Given the investment horizon of 90 days First State Financial is expected to generate 14.23 times more return on investment than Pinelawn Cemetery. However, First State is 14.23 times more volatile than Pinelawn Cemetery. It trades about 0.1 of its potential returns per unit of risk. Pinelawn Cemetery is currently generating about 0.0 per unit of risk. If you would invest 4.80 in First State Financial on August 26, 2024 and sell it today you would lose (0.33) from holding First State Financial or give up 6.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 43.41% |
| Values | Daily Returns |
First State Financial vs. Pinelawn Cemetery
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Pinelawn Cemetery |
First State and Pinelawn Cemetery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and Pinelawn Cemetery
The main advantage of trading using opposite First State and Pinelawn Cemetery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, Pinelawn Cemetery 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 Pinelawn Cemetery will offset losses from the drop in Pinelawn Cemetery'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 |
| Pinelawn Cemetery vs. DTE Energy | Pinelawn Cemetery vs. Rollins | Pinelawn Cemetery vs. Service International | Pinelawn Cemetery vs. HR Block |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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