Correlation Between Heritage-Crystal and First Business
Can any of the company-specific risk be diversified away by investing in both Heritage-Crystal and First Business 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 Heritage-Crystal and First Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heritage Crystal Clean and First Business Financial, you can compare the effects of market volatilities on Heritage-Crystal and First Business 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 Heritage-Crystal with a short position of First Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage-Crystal and First Business.
Diversification Opportunities for Heritage-Crystal and First Business
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Heritage-Crystal and First is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Crystal Clean and First Business Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Business Financial and Heritage-Crystal 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 Heritage Crystal Clean are associated (or correlated) with First Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Business Financial has no effect on the direction of Heritage-Crystal i.e., Heritage-Crystal and First Business go up and down completely randomly.
Pair Corralation between Heritage-Crystal and First Business
If you would invest 4,417 in First Business Financial on August 24, 2024 and sell it today you would earn a total of 608.00 from holding First Business Financial or generate 13.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.35% |
| Values | Daily Returns |
Heritage Crystal Clean vs. First Business Financial
Performance |
| Timeline |
| Heritage Crystal Clean |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Business Financial |
Heritage-Crystal and First Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heritage-Crystal and First Business
The main advantage of trading using opposite Heritage-Crystal and First Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage-Crystal position performs unexpectedly, First Business 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 Business will offset losses from the drop in First Business' long position.| Heritage-Crystal vs. Casella Waste Systems | Heritage-Crystal vs. Montrose Environmental Grp | Heritage-Crystal vs. Clean Harbors | Heritage-Crystal vs. Waste Connections |
| First Business vs. Home Federal Bancorp | First Business vs. Lake Shore Bancorp | First Business vs. Old Point Financial | First Business vs. Parke 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 CEOs Directory module to screen CEOs from public companies around the world.
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