Correlation Between First National and Altagas Cum

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

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

Diversification Opportunities for First National and Altagas Cum

0.57

Correlation Coefficient

First National  Altagas Cum

Very weak diversification

The 3 months correlation between First and Altagas is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding First National Financial and Altagas Cum Red in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altagas Cum Red and First National 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 National Financial are associated (or correlated) with Altagas Cum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altagas Cum Red has no effect on the direction of First National i.e., First National and Altagas Cum go up and down completely randomly.

Pair Corralation between First National and Altagas Cum

Assuming the 90 days trading horizon First National Financial is expected to under-perform the Altagas Cum. In addition to that, First National is 2.12 times more volatile than Altagas Cum Red. It trades about -0.18 of its total potential returns per unit of risk. Altagas Cum Red is currently generating about 0.45 per unit of volatility. If you would invest  2,020  in Altagas Cum Red on October 23, 2024 and sell it today you would earn a total of  141.00  from holding Altagas Cum Red or generate 6.98% return on investment over 90 days.

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

First National Financial  vs.  Altagas Cum Red

First National Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First National Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, First National is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Altagas Cum Red

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Altagas Cum Red are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Altagas Cum sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First National and Altagas Cum

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

The idea behind First National Financial and Altagas Cum Red 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.