Correlation Between HomeChoice Investments and FNB ETN

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

By analyzing existing cross correlation between HomeChoice Investments and FNB ETN JPMORGQ, you can compare the effects of market volatilities on HomeChoice Investments and FNB ETN 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 HomeChoice Investments with a short position of FNB ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeChoice Investments and FNB ETN.

Diversification Opportunities for HomeChoice Investments and FNB ETN

-0.83

Correlation Coefficient

HomeChoice Investments  FNB ETN

Pay attention - limited upside

The 3 months correlation between HomeChoice and FNB is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding HomeChoice Investments and FNB ETN JPMORGQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB ETN JPMORGQ and HomeChoice Investments 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 HomeChoice Investments are associated (or correlated) with FNB ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB ETN JPMORGQ has no effect on the direction of HomeChoice Investments i.e., HomeChoice Investments and FNB ETN go up and down completely randomly.

Pair Corralation between HomeChoice Investments and FNB ETN

Assuming the 90 days trading horizon HomeChoice Investments is expected to generate 13.43 times less return on investment than FNB ETN. In addition to that, HomeChoice Investments is 3.36 times more volatile than FNB ETN JPMORGQ. It trades about 0.01 of its total potential returns per unit of risk. FNB ETN JPMORGQ is currently generating about 0.6 per unit of volatility. If you would invest  256,200  in FNB ETN JPMORGQ on October 22, 2024 and sell it today you would earn a total of  12,700  from holding FNB ETN JPMORGQ or generate 4.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	47.06%
Values	Daily Returns

HomeChoice Investments  vs.  FNB ETN JPMORGQ

HomeChoice Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HomeChoice Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

FNB ETN JPMORGQ

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FNB ETN JPMORGQ are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, FNB ETN sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HomeChoice Investments and FNB ETN

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

The idea behind HomeChoice Investments and FNB ETN JPMORGQ 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.