Correlation Between First International and Eldav L

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

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

Diversification Opportunities for First International and Eldav L

0.24

Correlation Coefficient

First International  Eldav L

Modest diversification

The 3 months correlation between First and Eldav is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding First International Bank and Eldav L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldav L and First International 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 International Bank are associated (or correlated) with Eldav L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldav L has no effect on the direction of First International i.e., First International and Eldav L go up and down completely randomly.

Pair Corralation between First International and Eldav L

Assuming the 90 days trading horizon First International Bank is expected to generate 0.56 times more return on investment than Eldav L. However, First International Bank is 1.79 times less risky than Eldav L. It trades about 0.14 of its potential returns per unit of risk. Eldav L is currently generating about 0.08 per unit of risk. If you would invest  1,761,982  in First International Bank on December 21, 2024 and sell it today you would earn a total of  158,018  from holding First International Bank or generate 8.97% return on investment over 90 days.

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

First International Bank  vs.  Eldav L

First International Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First International Bank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, First International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Eldav L

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eldav L are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Eldav L may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with First International and Eldav L

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

The idea behind First International Bank and Eldav L 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.