Correlation Between First Farmers and First IC

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

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

Diversification Opportunities for First Farmers and First IC

-0.86

Correlation Coefficient

First Farmers  First IC

Pay attention - limited upside

The 3 months correlation between First and First is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding First Farmers and and First IC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First IC and First Farmers 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 First Farmers and are associated (or correlated) with First IC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First IC has no effect on the direction of First Farmers i.e., First Farmers and First IC go up and down completely randomly.

Pair Corralation between First Farmers and First IC

Given the investment horizon of 90 days First Farmers and is expected to generate 0.92 times more return on investment than First IC. However, First Farmers and is 1.09 times less risky than First IC. It trades about 0.2 of its potential returns per unit of risk. First IC is currently generating about -0.16 per unit of risk. If you would invest  4,450  in First Farmers and on September 1, 2025 and sell it today you would earn a total of  370.00  from holding First Farmers and or generate 8.31% return on investment over 90 days.

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

First Farmers and  vs.  First IC

First Farmers

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Farmers and are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, First Farmers may actually be approaching a critical reversion point that can send shares even higher in December 2025.

First IC

Risk-Adjusted Performance

Weakest

Over the last 90 days First IC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with First Farmers and First IC

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

The idea behind First Farmers and and First IC 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.