Correlation Between TINC Comm and FIRST NATIONAL

Can any of the company-specific risk be diversified away by investing in both TINC Comm 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 TINC Comm and FIRST NATIONAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TINC Comm VA and FIRST NATIONAL FIN, you can compare the effects of market volatilities on TINC Comm 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 TINC Comm with a short position of FIRST NATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TINC Comm and FIRST NATIONAL.

Diversification Opportunities for TINC Comm and FIRST NATIONAL

-0.59

Correlation Coefficient

TINC Comm  FIRST NATIONAL

Excellent diversification

The 3 months correlation between TINC and FIRST is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding TINC Comm VA 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 TINC Comm 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 TINC Comm VA 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 TINC Comm i.e., TINC Comm and FIRST NATIONAL go up and down completely randomly.

Pair Corralation between TINC Comm and FIRST NATIONAL

Assuming the 90 days horizon TINC Comm VA is expected to under-perform the FIRST NATIONAL. But the stock apears to be less risky and, when comparing its historical volatility, TINC Comm VA is 2.13 times less risky than FIRST NATIONAL. The stock trades about -0.01 of its potential returns per unit of risk. The FIRST NATIONAL FIN is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,148  in FIRST NATIONAL FIN on October 4, 2024 and sell it today you would earn a total of  492.00  from holding FIRST NATIONAL FIN or generate 22.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

TINC Comm VA  vs.  FIRST NATIONAL FIN

TINC Comm VA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TINC Comm VA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

FIRST NATIONAL FIN

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FIRST NATIONAL FIN are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FIRST NATIONAL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with TINC Comm and FIRST NATIONAL

The main advantage of trading using opposite TINC Comm and FIRST NATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TINC Comm 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 TINC Comm VA 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.