Correlation Between First Niles and FFW

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

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

Diversification Opportunities for First Niles and FFW

0.11

Correlation Coefficient

First Niles  FFW

Average diversification

The 3 months correlation between First and FFW is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding First Niles Financial and FFW Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FFW Corporation and First Niles 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 Niles Financial are associated (or correlated) with FFW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FFW Corporation has no effect on the direction of First Niles i.e., First Niles and FFW go up and down completely randomly.

Pair Corralation between First Niles and FFW

If you would invest  3,319  in FFW Corporation on September 20, 2024 and sell it today you would earn a total of  584.00  from holding FFW Corporation or generate 17.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.68%
Values	Daily Returns

First Niles Financial  vs.  FFW Corp.

First Niles Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Niles Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, First Niles is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

FFW Corporation

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FFW Corporation are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, FFW may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with First Niles and FFW

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

The idea behind First Niles Financial and FFW Corporation 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..