Correlation Between First State and TravelCenters
Can any of the company-specific risk be diversified away by investing in both First State and TravelCenters 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 TravelCenters 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 TravelCenters Of America, you can compare the effects of market volatilities on First State and TravelCenters 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 TravelCenters. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and TravelCenters.
Diversification Opportunities for First State and TravelCenters
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and TravelCenters is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and TravelCenters Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TravelCenters Of America 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 TravelCenters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TravelCenters Of America has no effect on the direction of First State i.e., First State and TravelCenters go up and down completely randomly.
Pair Corralation between First State and TravelCenters
If you would invest 2,529 in TravelCenters Of America on September 1, 2024 and sell it today you would earn a total of 0.00 from holding TravelCenters Of America or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First State Financial vs. TravelCenters Of America
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| TravelCenters Of America |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First State and TravelCenters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and TravelCenters
The main advantage of trading using opposite First State and TravelCenters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, TravelCenters 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 TravelCenters will offset losses from the drop in TravelCenters' 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 |
| TravelCenters vs. B Riley Financial | TravelCenters vs. Sotherly Hotels Series | TravelCenters vs. B Riley Financial |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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