Correlation Between First National and RESAAS Services

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

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

Diversification Opportunities for First National and RESAAS Services

-0.08

Correlation Coefficient

First National  RESAAS Services

Good diversification

The 3 months correlation between First and RESAAS is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding First National Energy and RESAAS Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RESAAS Services and First National 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 National Energy are associated (or correlated) with RESAAS Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RESAAS Services has no effect on the direction of First National i.e., First National and RESAAS Services go up and down completely randomly.

Pair Corralation between First National and RESAAS Services

Given the investment horizon of 90 days First National Energy is expected to under-perform the RESAAS Services. But the pink sheet apears to be less risky and, when comparing its historical volatility, First National Energy is 1.85 times less risky than RESAAS Services. The pink sheet trades about -0.15 of its potential returns per unit of risk. The RESAAS Services is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  30.00  in RESAAS Services on May 5, 2025 and sell it today you would lose (9.00) from holding RESAAS Services or give up 30.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

First National Energy  vs.  RESAAS Services

First National Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days First National Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

RESAAS Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days RESAAS Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with First National and RESAAS Services

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

The idea behind First National Energy and RESAAS Services 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..