Correlation Between Intouch Holdings and FIRST NATIONAL
Can any of the company-specific risk be diversified away by investing in both Intouch Holdings and FIRST NATIONAL 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 Intouch Holdings and FIRST NATIONAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intouch Holdings Public and FIRST NATIONAL FIN, you can compare the effects of market volatilities on Intouch Holdings and FIRST NATIONAL 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 Intouch Holdings with a short position of FIRST NATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intouch Holdings and FIRST NATIONAL.
Diversification Opportunities for Intouch Holdings and FIRST NATIONAL
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intouch and FIRST is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Intouch Holdings Public and FIRST NATIONAL FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST NATIONAL FIN and Intouch Holdings 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 Intouch Holdings Public are associated (or correlated) with FIRST NATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST NATIONAL FIN has no effect on the direction of Intouch Holdings i.e., Intouch Holdings and FIRST NATIONAL go up and down completely randomly.
Pair Corralation between Intouch Holdings and FIRST NATIONAL
Assuming the 90 days trading horizon Intouch Holdings Public is expected to generate 0.73 times more return on investment than FIRST NATIONAL. However, Intouch Holdings Public is 1.38 times less risky than FIRST NATIONAL. It trades about 0.14 of its potential returns per unit of risk. FIRST NATIONAL FIN is currently generating about 0.05 per unit of risk. If you would invest 174.00 in Intouch Holdings Public on August 27, 2024 and sell it today you would earn a total of 92.00 from holding Intouch Holdings Public or generate 52.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intouch Holdings Public vs. FIRST NATIONAL FIN
Performance |
| Timeline |
| Intouch Holdings Public |
| FIRST NATIONAL FIN |
Intouch Holdings and FIRST NATIONAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intouch Holdings and FIRST NATIONAL
The main advantage of trading using opposite Intouch Holdings and FIRST NATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intouch Holdings position performs unexpectedly, FIRST NATIONAL 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 NATIONAL will offset losses from the drop in FIRST NATIONAL's long position.The idea behind Intouch Holdings Public and FIRST NATIONAL FIN pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| FIRST NATIONAL vs. FUYO GENERAL LEASE | FIRST NATIONAL vs. JJ SNACK FOODS | FIRST NATIONAL vs. Air Lease | FIRST NATIONAL vs. KAUFMAN ET BROAD |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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