Correlation Between Alternus Energy and First National

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

By analyzing existing cross correlation between Alternus Energy Group and First National Energy, you can compare the effects of market volatilities on Alternus Energy 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 Alternus Energy with a short position of First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternus Energy and First National.

Diversification Opportunities for Alternus Energy and First National

0.18

Correlation Coefficient

Alternus Energy  First National

Average diversification

The 3 months correlation between Alternus and First is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Alternus Energy Group and First National Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Energy and Alternus Energy 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 Alternus Energy Group 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 Energy has no effect on the direction of Alternus Energy i.e., Alternus Energy and First National go up and down completely randomly.

Pair Corralation between Alternus Energy and First National

Assuming the 90 days horizon Alternus Energy Group is expected to under-perform the First National. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alternus Energy Group is 1.38 times less risky than First National. The pink sheet trades about -0.13 of its potential returns per unit of risk. The First National Energy is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  9.06  in First National Energy on December 2, 2024 and sell it today you would lose (4.63) from holding First National Energy or give up 51.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

Alternus Energy Group  vs.  First National Energy

Alternus Energy Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alternus Energy Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

First National Energy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First National Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, First National exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alternus Energy and First National

The main advantage of trading using opposite Alternus Energy and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternus Energy 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 Alternus Energy Group and First National Energy 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.