Correlation Between Juniata Valley and FNB

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

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

Diversification Opportunities for Juniata Valley and FNB

0.02

Correlation Coefficient

Juniata Valley  FNB

Significant diversification

The 3 months correlation between Juniata and FNB is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and FNB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB Inc and Juniata Valley 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 Juniata Valley Financial are associated (or correlated) with FNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB Inc has no effect on the direction of Juniata Valley i.e., Juniata Valley and FNB go up and down completely randomly.

Pair Corralation between Juniata Valley and FNB

Given the investment horizon of 90 days Juniata Valley is expected to generate 27.94 times less return on investment than FNB. In addition to that, Juniata Valley is 1.28 times more volatile than FNB Inc. It trades about 0.0 of its total potential returns per unit of risk. FNB Inc is currently generating about 0.08 per unit of volatility. If you would invest  2,300  in FNB Inc on August 31, 2024 and sell it today you would earn a total of  200.00  from holding FNB Inc or generate 8.7% return on investment over 90 days.

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

Juniata Valley Financial  vs.  FNB Inc

Juniata Valley Financial

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Juniata Valley Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Juniata Valley is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

FNB Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FNB Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, FNB may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Juniata Valley and FNB

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

The idea behind Juniata Valley Financial and FNB Inc 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.