Correlation Between FUYO GENERAL and National Bank
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL and National Bank 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 FUYO GENERAL and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and National Bank Holdings, you can compare the effects of market volatilities on FUYO GENERAL and National Bank 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 FUYO GENERAL with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and National Bank.
Diversification Opportunities for FUYO GENERAL and National Bank
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FUYO and National is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings and FUYO GENERAL 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 FUYO GENERAL LEASE are associated (or correlated) with National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank Holdings has no effect on the direction of FUYO GENERAL i.e., FUYO GENERAL and National Bank go up and down completely randomly.
Pair Corralation between FUYO GENERAL and National Bank
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the National Bank. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 1.97 times less risky than National Bank. The stock trades about -0.14 of its potential returns per unit of risk. The National Bank Holdings is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 4,040 in National Bank Holdings on October 29, 2024 and sell it today you would lose (100.00) from holding National Bank Holdings or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. National Bank Holdings
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| National Bank Holdings |
FUYO GENERAL and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and National Bank
The main advantage of trading using opposite FUYO GENERAL and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| FUYO GENERAL vs. Magnachip Semiconductor | FUYO GENERAL vs. SENECA FOODS A | FUYO GENERAL vs. GURU ORGANIC ENERGY | FUYO GENERAL vs. ON SEMICONDUCTOR |
| National Bank vs. The PNC Financial | National Bank vs. Huntington Bancshares Incorporated | National Bank vs. Regions Financial | National Bank vs. KeyCorp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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