Correlation Between FIRST NATIONAL and Deutsche Pfandbriefbank

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

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

Diversification Opportunities for FIRST NATIONAL and Deutsche Pfandbriefbank

-0.72

Correlation Coefficient

FIRST NATIONAL  Deutsche Pfandbriefbank

Pay attention - limited upside

The 3 months correlation between FIRST and Deutsche is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding FIRST NATIONAL FIN and Deutsche Pfandbriefbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Pfandbriefbank and FIRST NATIONAL 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 FIRST NATIONAL FIN are associated (or correlated) with Deutsche Pfandbriefbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Pfandbriefbank has no effect on the direction of FIRST NATIONAL i.e., FIRST NATIONAL and Deutsche Pfandbriefbank go up and down completely randomly.

Pair Corralation between FIRST NATIONAL and Deutsche Pfandbriefbank

Assuming the 90 days horizon FIRST NATIONAL FIN is expected to under-perform the Deutsche Pfandbriefbank. In addition to that, FIRST NATIONAL is 1.44 times more volatile than Deutsche Pfandbriefbank AG. It trades about -0.22 of its total potential returns per unit of risk. Deutsche Pfandbriefbank AG is currently generating about -0.26 per unit of volatility. If you would invest  506.00  in Deutsche Pfandbriefbank AG on September 23, 2024 and sell it today you would lose (39.00) from holding Deutsche Pfandbriefbank AG or give up 7.71% of portfolio value over 90 days.

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

FIRST NATIONAL FIN  vs.  Deutsche Pfandbriefbank AG

FIRST NATIONAL FIN

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FIRST NATIONAL FIN are ranked lower than 6 (%) 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 January 2025.

Deutsche Pfandbriefbank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Pfandbriefbank AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with FIRST NATIONAL and Deutsche Pfandbriefbank

The main advantage of trading using opposite FIRST NATIONAL and Deutsche Pfandbriefbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST NATIONAL position performs unexpectedly, Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank will offset losses from the drop in Deutsche Pfandbriefbank's long position.

The idea behind FIRST NATIONAL FIN and Deutsche Pfandbriefbank AG 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.