Correlation Between New York and First Horizon
Can any of the company-specific risk be diversified away by investing in both New York and First Horizon 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 New York and First Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New York Community and First Horizon National, you can compare the effects of market volatilities on New York and First Horizon 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 New York with a short position of First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and First Horizon.
Diversification Opportunities for New York and First Horizon
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and First is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding New York Community and First Horizon National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon National and New York 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 New York Community are associated (or correlated) with First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon National has no effect on the direction of New York i.e., New York and First Horizon go up and down completely randomly.
Pair Corralation between New York and First Horizon
Given the investment horizon of 90 days New York is expected to generate 3.92 times less return on investment than First Horizon. In addition to that, New York is 1.34 times more volatile than First Horizon National. It trades about 0.03 of its total potential returns per unit of risk. First Horizon National is currently generating about 0.17 per unit of volatility. If you would invest 1,617 in First Horizon National on August 31, 2024 and sell it today you would earn a total of 492.00 from holding First Horizon National or generate 30.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
New York Community vs. First Horizon National
Performance |
| Timeline |
| New York Community |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| First Horizon National |
New York and First Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New York and First Horizon
The main advantage of trading using opposite New York and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New York position performs unexpectedly, First Horizon 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 Horizon will offset losses from the drop in First Horizon's long position.| New York vs. KeyCorp | New York vs. Fifth Third Bancorp | New York vs. Regions Financial | New York vs. Zions Bancorporation |
| First Horizon vs. Zions Bancorporation | First Horizon vs. KeyCorp | First Horizon vs. Comerica | First Horizon vs. Western Alliance Bancorporation |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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