Correlation Between First International and FIBI Holdings

Can any of the company-specific risk be diversified away by investing in both First International and FIBI Holdings 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 FIBI Holdings 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 FIBI Holdings, you can compare the effects of market volatilities on First International and FIBI Holdings 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 FIBI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of First International and FIBI Holdings.

Diversification Opportunities for First International and FIBI Holdings

0.67

Correlation Coefficient

First International  FIBI Holdings

Poor diversification

The 3 months correlation between First and FIBI is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding First International Bank and FIBI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBI Holdings 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 FIBI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBI Holdings has no effect on the direction of First International i.e., First International and FIBI Holdings go up and down completely randomly.

Pair Corralation between First International and FIBI Holdings

Assuming the 90 days trading horizon First International Bank is expected to generate 1.15 times more return on investment than FIBI Holdings. However, First International is 1.15 times more volatile than FIBI Holdings. It trades about 0.11 of its potential returns per unit of risk. FIBI Holdings is currently generating about 0.13 per unit of risk. If you would invest  1,738,252  in First International Bank on December 30, 2024 and sell it today you would earn a total of  133,748  from holding First International Bank or generate 7.69% return on investment over 90 days.

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

First International Bank  vs.  FIBI Holdings

First International Bank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First International Bank are ranked lower than 8 (%) 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.

FIBI Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FIBI Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, FIBI Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with First International and FIBI Holdings

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

The idea behind First International Bank and FIBI Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.