Correlation Between FNB ETN and Trematon Capital

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

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

Diversification Opportunities for FNB ETN and Trematon Capital

-0.56

Correlation Coefficient

FNB ETN  Trematon Capital

Excellent diversification

The 3 months correlation between FNB and Trematon is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding FNB ETN JPMORGQ and Trematon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trematon Capital Inv and FNB ETN 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 FNB ETN JPMORGQ are associated (or correlated) with Trematon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trematon Capital Inv has no effect on the direction of FNB ETN i.e., FNB ETN and Trematon Capital go up and down completely randomly.

Pair Corralation between FNB ETN and Trematon Capital

Assuming the 90 days trading horizon FNB ETN JPMORGQ is expected to generate 0.37 times more return on investment than Trematon Capital. However, FNB ETN JPMORGQ is 2.68 times less risky than Trematon Capital. It trades about 0.18 of its potential returns per unit of risk. Trematon Capital Investments is currently generating about 0.02 per unit of risk. If you would invest  148,600  in FNB ETN JPMORGQ on October 4, 2024 and sell it today you would earn a total of  103,400  from holding FNB ETN JPMORGQ or generate 69.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	54.43%
Values	Daily Returns

FNB ETN JPMORGQ  vs.  Trematon Capital Investments

FNB ETN JPMORGQ

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days FNB ETN JPMORGQ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat unsteady basic indicators, FNB ETN sustained solid returns over the last few months and may actually be approaching a breakup point.

Trematon Capital Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trematon Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Trematon Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with FNB ETN and Trematon Capital

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

The idea behind FNB ETN JPMORGQ and Trematon Capital Investments 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.