Correlation Between FNB Corp and Plus500

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Can any of the company-specific risk be diversified away by investing in both FNB Corp and Plus500 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 FNB Corp and Plus500 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FNB Corp and Plus500, you can compare the effects of market volatilities on FNB Corp and Plus500 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 FNB Corp with a short position of Plus500. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNB Corp and Plus500.

Diversification Opportunities for FNB Corp and Plus500

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between FNB Corp and Plus500 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding FNB Corp and Plus500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plus500 and FNB Corp 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 FNB Corp are associated (or correlated) with Plus500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plus500 has no effect on the direction of FNB Corp i.e., FNB Corp and Plus500 go up and down completely randomly.

Pair Corralation between FNB Corp and Plus500

Considering the 90-day investment horizon FNB Corp is expected to generate 1.28 times more return on investment than Plus500. However, FNB Corp is 1.28 times more volatile than Plus500. It trades about 0.05 of its potential returns per unit of risk. Plus500 is currently generating about 0.01 per unit of risk. If you would invest  1,064  in FNB Corp on May 15, 2022 and sell it today you would earn a total of  208.00  from holding FNB Corp or generate 19.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

FNB Corp  vs.  Plus500

 Performance (%) 
       Timeline  
FNB Corp 
FNB Corp Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in FNB Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat sluggish basic indicators, FNB Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

FNB Corp Price Channel

Plus500 
Plus500 Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Plus500 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Plus500 may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Plus500 Price Channel

FNB Corp and Plus500 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FNB Corp and Plus500

The main advantage of trading using opposite FNB Corp and Plus500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNB Corp position performs unexpectedly, Plus500 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 Plus500 will offset losses from the drop in Plus500's long position.

FNB Corp

Pair trading matchups for FNB Corp

The idea behind FNB Corp and Plus500 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 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.

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