Correlation Between National Capital and First Citizens
Can any of the company-specific risk be diversified away by investing in both National Capital and First Citizens 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 First Citizens 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 The First Citizens, you can compare the effects of market volatilities on National Capital and First Citizens 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 First Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Capital and First Citizens.
Diversification Opportunities for National Capital and First Citizens
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between National and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding National Capital Bank and The First Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens 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 First Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens has no effect on the direction of National Capital i.e., National Capital and First Citizens go up and down completely randomly.
Pair Corralation between National Capital and First Citizens
Given the investment horizon of 90 days National Capital Bank is expected to generate 2.0 times more return on investment than First Citizens. However, National Capital is 2.0 times more volatile than The First Citizens. It trades about 0.07 of its potential returns per unit of risk. The First Citizens is currently generating about -0.02 per unit of risk. If you would invest 17,000 in National Capital Bank on August 24, 2024 and sell it today you would earn a total of 9,900 from holding National Capital Bank or generate 58.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 66.86% |
| Values | Daily Returns |
National Capital Bank vs. The First Citizens
Performance |
| Timeline |
| National Capital Bank |
| First Citizens |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
National Capital and First Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Capital and First Citizens
The main advantage of trading using opposite National Capital and First Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Capital position performs unexpectedly, First Citizens 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 Citizens will offset losses from the drop in First Citizens' 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 |
| First Citizens vs. Hooker Furniture | First Citizens vs. Mesa Air Group | First Citizens vs. Ryanair Holdings PLC | First Citizens vs. United Guardian |
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 Stocks Directory module to find actively traded stocks across global markets.
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