Correlation Between AdCapital and FIRST NATIONAL

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

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

Diversification Opportunities for AdCapital and FIRST NATIONAL

0.0

Correlation Coefficient

AdCapital  FIRST NATIONAL

Pay attention - limited upside

The 3 months correlation between AdCapital and FIRST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AdCapital AG 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 AdCapital 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 AdCapital AG 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 AdCapital i.e., AdCapital and FIRST NATIONAL go up and down completely randomly.

Pair Corralation between AdCapital and FIRST NATIONAL

If you would invest (100.00) in FIRST NATIONAL FIN on October 4, 2024 and sell it today you would earn a total of  100.00  from holding FIRST NATIONAL FIN or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AdCapital AG  vs.  FIRST NATIONAL FIN

AdCapital AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AdCapital AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AdCapital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the 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 weak basic indicators, FIRST NATIONAL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AdCapital and FIRST NATIONAL

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

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.