Two Equities Correlation Analysis
Specify exactly 2 symbols:
FSBC
Add Two Equities
This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Five Star and NYSE Composite
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Five and NYSE is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Five Star Bancorp and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Five Star 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 Five Star Bancorp are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Five Star i.e., Five Star and NYSE Composite go up and down completely randomly.
Pair Corralation between Five Star and NYSE Composite
Given the investment horizon of 90 days Five Star Bancorp is expected to under-perform the NYSE Composite. In addition to that, Five Star is 2.98 times more volatile than NYSE Composite. It trades about -0.16 of its total potential returns per unit of risk. NYSE Composite is currently generating about -0.32 per unit of volatility. If you would invest 1,821,412 in NYSE Composite on January 21, 2024 and sell it today you would lose (75,535) from holding NYSE Composite or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Five Star Bancorp vs. NYSE Composite
Performance |
| Timeline |
Five Star and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Five Star Bancorp
Pair trading matchups for Five Star
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Five Star and NYSE Composite
The main advantage of trading using opposite Five Star and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Star position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.The idea behind Five Star Bancorp and NYSE Composite 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.| NYSE Composite vs. BK Technologies | NYSE Composite vs. Ryanair Holdings PLC | NYSE Composite vs. Nok Airlines Public | NYSE Composite vs. FormFactor |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |