Correlation Between Reliq Health and First National

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

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

Diversification Opportunities for Reliq Health and First National

0.0

Correlation Coefficient

Reliq Health  First National

Pay attention - limited upside

The 3 months correlation between Reliq and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Reliq Health Technologies and First National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Financial and Reliq Health 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 Reliq Health Technologies are associated (or correlated) with First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Financial has no effect on the direction of Reliq Health i.e., Reliq Health and First National go up and down completely randomly.

Pair Corralation between Reliq Health and First National

Assuming the 90 days horizon Reliq Health Technologies is expected to under-perform the First National. In addition to that, Reliq Health is 3.27 times more volatile than First National Financial. It trades about -0.04 of its total potential returns per unit of risk. First National Financial is currently generating about 0.05 per unit of volatility. If you would invest  1,214  in First National Financial on October 25, 2024 and sell it today you would earn a total of  311.00  from holding First National Financial or generate 25.62% return on investment over 90 days.

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

Reliq Health Technologies  vs.  First National Financial

Reliq Health Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reliq Health Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Reliq Health is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

First National Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First National Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, First National is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Reliq Health and First National

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

The idea behind Reliq Health Technologies and First National 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.