Correlation Between National Capital and FFW
Can any of the company-specific risk be diversified away by investing in both National Capital and FFW 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 National Capital and FFW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Capital Bank and FFW Corporation, you can compare the effects of market volatilities on National Capital and FFW 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 National Capital with a short position of FFW. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Capital and FFW.
Diversification Opportunities for National Capital and FFW
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and FFW is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding National Capital Bank and FFW Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FFW Corporation and National Capital 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 National Capital Bank are associated (or correlated) with FFW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FFW Corporation has no effect on the direction of National Capital i.e., National Capital and FFW go up and down completely randomly.
Pair Corralation between National Capital and FFW
Given the investment horizon of 90 days National Capital Bank is expected to generate 24.37 times more return on investment than FFW. However, National Capital is 24.37 times more volatile than FFW Corporation. It trades about 0.34 of its potential returns per unit of risk. FFW Corporation is currently generating about 0.0 per unit of risk. If you would invest 19,880 in National Capital Bank on August 26, 2024 and sell it today you would earn a total of 7,020 from holding National Capital Bank or generate 35.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
National Capital Bank vs. FFW Corp.
Performance |
| Timeline |
| National Capital Bank |
| FFW Corporation |
National Capital and FFW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Capital and FFW
The main advantage of trading using opposite National Capital and FFW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Capital position performs unexpectedly, FFW 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 FFW will offset losses from the drop in FFW's long position.| National Capital vs. Delhi Bank Corp | National Capital vs. CCSB Financial Corp | National Capital vs. Bank of Utica | National Capital vs. BEO Bancorp |
| FFW vs. First Farmers Financial | FFW vs. Farmers Merchants Bancorp | FFW vs. Lakeland Financial | FFW vs. Eagle 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |