Correlation Between Famous Brands and First Shares

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

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

Diversification Opportunities for Famous Brands and First Shares

1.0

Correlation Coefficient

Famous Brands  First Shares

No risk reduction

The 3 months correlation between Famous and First is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Famous Brands Ltd and First Shares Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Shares Bancorp and Famous Brands 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 Famous Brands Ltd are associated (or correlated) with First Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Shares Bancorp has no effect on the direction of Famous Brands i.e., Famous Brands and First Shares go up and down completely randomly.

Pair Corralation between Famous Brands and First Shares

If you would invest  1.20  in First Shares Bancorp on July 29, 2025 and sell it today you would earn a total of  0.00  from holding First Shares Bancorp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

Famous Brands Ltd  vs.  First Shares Bancorp

Famous Brands

Risk-Adjusted Performance

Weakest

Over the last 90 days Famous Brands Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Famous Brands is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

First Shares Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days First Shares Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, First Shares is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Famous Brands and First Shares

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

The idea behind Famous Brands Ltd and First Shares Bancorp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.