Correlation Between NYSE Composite and FNB
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and FNB 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 NYSE Composite and FNB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and FNB Inc, you can compare the effects of market volatilities on NYSE Composite and FNB 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 NYSE Composite with a short position of FNB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and FNB.
Diversification Opportunities for NYSE Composite and FNB
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and FNB is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and FNB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB Inc and NYSE Composite 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 NYSE Composite are associated (or correlated) with FNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and FNB go up and down completely randomly.
Pair Corralation between NYSE Composite and FNB
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.33 times less return on investment than FNB. But when comparing it to its historical volatility, NYSE Composite is 3.34 times less risky than FNB. It trades about 0.16 of its potential returns per unit of risk. FNB Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,729 in FNB Inc on September 1, 2024 and sell it today you would earn a total of 771.00 from holding FNB Inc or generate 44.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 63.2% |
| Values | Daily Returns |
NYSE Composite vs. FNB Inc
Performance |
| Timeline |
NYSE Composite and FNB Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
FNB Inc
Pair trading matchups for FNB
Pair Trading with NYSE Composite and FNB
The main advantage of trading using opposite NYSE Composite and FNB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, FNB 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 FNB will offset losses from the drop in FNB's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| FNB vs. Century Financial Corp | FNB vs. Apollo Bancorp | FNB vs. Commercial National Financial | FNB vs. Eastern Michigan 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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