Correlation Between First International and Mobile Max

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

Diversification Opportunities for First International and Mobile Max

0.68

Correlation Coefficient

First International  Mobile Max

Poor diversification

The 3 months correlation between First and Mobile is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding First International Bank and Mobile Max M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Max M 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 Mobile Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Max M has no effect on the direction of First International i.e., First International and Mobile Max go up and down completely randomly.

Pair Corralation between First International and Mobile Max

Assuming the 90 days trading horizon First International is expected to generate 2.08 times less return on investment than Mobile Max. But when comparing it to its historical volatility, First International Bank is 2.43 times less risky than Mobile Max. It trades about 0.11 of its potential returns per unit of risk. Mobile Max M is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,400  in Mobile Max M on December 30, 2024 and sell it today you would earn a total of  500.00  from holding Mobile Max M or generate 14.71% 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.  Mobile Max M

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.

Mobile Max M

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mobile Max M are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Mobile Max sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First International and Mobile Max

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

The idea behind First International Bank and Mobile Max M 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.