Correlation Between Schweizerische Nationalbank and First Community
Can any of the company-specific risk be diversified away by investing in both Schweizerische Nationalbank and First Community 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 Schweizerische Nationalbank and First Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schweizerische Nationalbank and First Community Financial, you can compare the effects of market volatilities on Schweizerische Nationalbank and First Community 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 Schweizerische Nationalbank with a short position of First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizerische Nationalbank and First Community.
Diversification Opportunities for Schweizerische Nationalbank and First Community
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Schweizerische and First is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank and First Community Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community Financial and Schweizerische Nationalbank 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 Schweizerische Nationalbank are associated (or correlated) with First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community Financial has no effect on the direction of Schweizerische Nationalbank i.e., Schweizerische Nationalbank and First Community go up and down completely randomly.
Pair Corralation between Schweizerische Nationalbank and First Community
Assuming the 90 days horizon Schweizerische Nationalbank is expected to generate 1.12 times more return on investment than First Community. However, Schweizerische Nationalbank is 1.12 times more volatile than First Community Financial. It trades about -0.04 of its potential returns per unit of risk. First Community Financial is currently generating about -0.08 per unit of risk. If you would invest 500,000 in Schweizerische Nationalbank on September 2, 2024 and sell it today you would lose (125,000) from holding Schweizerische Nationalbank or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schweizerische Nationalbank vs. First Community Financial
Performance |
| Timeline |
| Schweizerische Nationalbank |
| First Community Financial |
Schweizerische Nationalbank and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweizerische Nationalbank and First Community
The main advantage of trading using opposite Schweizerische Nationalbank and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizerische Nationalbank position performs unexpectedly, First Community 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 Community will offset losses from the drop in First Community's long position.| Schweizerische Nationalbank vs. Piraeus Bank SA | Schweizerische Nationalbank vs. Turkiye Garanti Bankasi | Schweizerische Nationalbank vs. Uwharrie Capital Corp |
| First Community vs. CCSB Financial Corp | First Community vs. Bank of Utica | First Community vs. BEO Bancorp | First Community vs. First Community |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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