Correlation Between First National and Alternus Energy

Can any of the company-specific risk be diversified away by investing in both First National and Alternus Energy 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 Alternus Energy 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 Alternus Energy Group, you can compare the effects of market volatilities on First National and Alternus Energy 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 Alternus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and Alternus Energy.

Diversification Opportunities for First National and Alternus Energy

0.0

Correlation Coefficient

First National  Alternus Energy

Pay attention - limited upside

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

Pair Corralation between First National and Alternus Energy

If you would invest  64.00  in First National Energy on August 31, 2024 and sell it today you would lose (54.94) from holding First National Energy or give up 85.84% of portfolio value over 90 days.

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

First National Energy  vs.  Alternus Energy Group

First National Energy

Risk-Adjusted Performance

0 of 100

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 rather sound technical and fundamental indicators, First National is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Alternus Energy Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alternus Energy Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Alternus Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with First National and Alternus Energy

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

The idea behind First National Energy and Alternus Energy Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.