Correlation Between Tootsie Roll and First CommunityPFD

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

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

Diversification Opportunities for Tootsie Roll and First CommunityPFD

0.82

Correlation Coefficient

Tootsie Roll  First CommunityPFD

Very poor diversification

The 3 months correlation between Tootsie and First is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tootsie Roll Industries and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First CommunityPFD and Tootsie Roll 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 Tootsie Roll Industries are associated (or correlated) with First CommunityPFD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First CommunityPFD has no effect on the direction of Tootsie Roll i.e., Tootsie Roll and First CommunityPFD go up and down completely randomly.

Pair Corralation between Tootsie Roll and First CommunityPFD

Allowing for the 90-day total investment horizon Tootsie Roll Industries is expected to generate 1.9 times more return on investment than First CommunityPFD. However, Tootsie Roll is 1.9 times more volatile than First Community. It trades about 0.2 of its potential returns per unit of risk. First Community is currently generating about 0.12 per unit of risk. If you would invest  3,571  in Tootsie Roll Industries on July 7, 2025 and sell it today you would earn a total of  785.00  from holding Tootsie Roll Industries or generate 21.98% return on investment over 90 days.

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

Tootsie Roll Industries  vs.  First Community

Tootsie Roll Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tootsie Roll Industries are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Tootsie Roll reported solid returns over the last few months and may actually be approaching a breakup point.

First CommunityPFD

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in First Community are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, First CommunityPFD may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Tootsie Roll and First CommunityPFD

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

The idea behind Tootsie Roll Industries and First Community 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.