Correlation Between 5N Plus and First Ottawa

Can any of the company-specific risk be diversified away by investing in both 5N Plus and First Ottawa 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 5N Plus and First Ottawa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 5N Plus and First Ottawa Bancshares, you can compare the effects of market volatilities on 5N Plus and First Ottawa 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 5N Plus with a short position of First Ottawa. Check out your portfolio center. Please also check ongoing floating volatility patterns of 5N Plus and First Ottawa.

Diversification Opportunities for 5N Plus and First Ottawa

0.0

Correlation Coefficient

5N Plus  First Ottawa

Pay attention - limited upside

The 3 months correlation between FPLSF and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 5N Plus and First Ottawa Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ottawa Bancshares and 5N Plus 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 5N Plus are associated (or correlated) with First Ottawa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ottawa Bancshares has no effect on the direction of 5N Plus i.e., 5N Plus and First Ottawa go up and down completely randomly.

Pair Corralation between 5N Plus and First Ottawa

Assuming the 90 days horizon 5N Plus is expected to generate 2.32 times more return on investment than First Ottawa. However, 5N Plus is 2.32 times more volatile than First Ottawa Bancshares. It trades about 0.3 of its potential returns per unit of risk. First Ottawa Bancshares is currently generating about -0.05 per unit of risk. If you would invest  465.00  in 5N Plus on April 28, 2025 and sell it today you would earn a total of  410.00  from holding 5N Plus or generate 88.17% return on investment over 90 days.

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

5N Plus  vs.  First Ottawa Bancshares

5N Plus

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 5N Plus are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, 5N Plus reported solid returns over the last few months and may actually be approaching a breakup point.

First Ottawa Bancshares

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Ottawa Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, First Ottawa is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 5N Plus and First Ottawa

The main advantage of trading using opposite 5N Plus and First Ottawa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 5N Plus position performs unexpectedly, First Ottawa 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 Ottawa will offset losses from the drop in First Ottawa's long position.

The idea behind 5N Plus and First Ottawa Bancshares 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.