Correlation Between Nasdaq and First Niles
Can any of the company-specific risk be diversified away by investing in both Nasdaq and First Niles 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 Nasdaq and First Niles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and First Niles Financial, you can compare the effects of market volatilities on Nasdaq and First Niles 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 Nasdaq with a short position of First Niles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and First Niles.
Diversification Opportunities for Nasdaq and First Niles
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nasdaq and First is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and First Niles Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Niles Financial and Nasdaq 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 Nasdaq Inc are associated (or correlated) with First Niles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Niles Financial has no effect on the direction of Nasdaq i.e., Nasdaq and First Niles go up and down completely randomly.
Pair Corralation between Nasdaq and First Niles
If you would invest 5,611 in Nasdaq Inc on September 25, 2024 and sell it today you would earn a total of 2,280 from holding Nasdaq Inc or generate 40.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 0.4% |
Values | Daily Returns |
Nasdaq Inc vs. First Niles Financial
Performance |
Timeline |
Nasdaq Inc |
First Niles Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nasdaq and First Niles Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nasdaq and First Niles
The main advantage of trading using opposite Nasdaq and First Niles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, First Niles 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 First Niles will offset losses from the drop in First Niles' long position.The idea behind Nasdaq Inc and First Niles Financial 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.First Niles vs. Western Alliance Bancorporation | First Niles vs. Zions Bancorporation | First Niles vs. KeyCorp | First Niles vs. First Horizon National |
Check out your portfolio center.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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