Correlation Between Bank of San and FNB

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

By analyzing existing cross correlation between Bank of San and FNB Inc, you can compare the effects of market volatilities on Bank of San and FNB 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 Bank of San with a short position of FNB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of San and FNB.

Diversification Opportunities for Bank of San and FNB

-0.69

Correlation Coefficient

Bank of San  FNB

Excellent diversification

The 3 months correlation between Bank and FNB is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank of San and FNB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB Inc and Bank of San 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 Bank of San are associated (or correlated) with FNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB Inc has no effect on the direction of Bank of San i.e., Bank of San and FNB go up and down completely randomly.

Pair Corralation between Bank of San and FNB

Given the investment horizon of 90 days Bank of San is expected to generate 0.79 times more return on investment than FNB. However, Bank of San is 1.27 times less risky than FNB. It trades about 0.32 of its potential returns per unit of risk. FNB Inc is currently generating about -0.21 per unit of risk. If you would invest  3,115  in Bank of San on October 10, 2024 and sell it today you would earn a total of  85.00  from holding Bank of San or generate 2.73% return on investment over 90 days.

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

Bank of San  vs.  FNB Inc

Bank of San

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of San are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Bank of San may actually be approaching a critical reversion point that can send shares even higher in February 2025.

FNB Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FNB Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bank of San and FNB

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

The idea behind Bank of San and FNB Inc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.