Correlation Between FIRST SAVINGS and SCIENCE IN

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

By analyzing existing cross correlation between FIRST SAVINGS FINL and SCIENCE IN SPORT, you can compare the effects of market volatilities on FIRST SAVINGS and SCIENCE IN 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 SAVINGS with a short position of SCIENCE IN. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SAVINGS and SCIENCE IN.

Diversification Opportunities for FIRST SAVINGS and SCIENCE IN

0.52

Correlation Coefficient

FIRST SAVINGS  SCIENCE IN

Very weak diversification

The 3 months correlation between FIRST and SCIENCE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SAVINGS FINL and SCIENCE IN SPORT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCIENCE IN SPORT and FIRST SAVINGS 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 SAVINGS FINL are associated (or correlated) with SCIENCE IN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCIENCE IN SPORT has no effect on the direction of FIRST SAVINGS i.e., FIRST SAVINGS and SCIENCE IN go up and down completely randomly.

Pair Corralation between FIRST SAVINGS and SCIENCE IN

Assuming the 90 days horizon FIRST SAVINGS FINL is expected to generate 0.64 times more return on investment than SCIENCE IN. However, FIRST SAVINGS FINL is 1.57 times less risky than SCIENCE IN. It trades about 0.04 of its potential returns per unit of risk. SCIENCE IN SPORT is currently generating about 0.01 per unit of risk. If you would invest  2,187  in FIRST SAVINGS FINL on October 26, 2024 and sell it today you would earn a total of  113.00  from holding FIRST SAVINGS FINL or generate 5.17% return on investment over 90 days.

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

FIRST SAVINGS FINL  vs.  SCIENCE IN SPORT

FIRST SAVINGS FINL

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FIRST SAVINGS FINL are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, FIRST SAVINGS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SCIENCE IN SPORT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCIENCE IN SPORT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SCIENCE IN is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FIRST SAVINGS and SCIENCE IN

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

The idea behind FIRST SAVINGS FINL and SCIENCE IN SPORT 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.