Correlation Between Black Mammoth and First National

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

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

Diversification Opportunities for Black Mammoth and First National

-0.02

Correlation Coefficient

Black Mammoth  First National

Good diversification

The 3 months correlation between Black and First is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Black Mammoth Metals and First National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Financial and Black Mammoth 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 Black Mammoth Metals are associated (or correlated) with First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Financial has no effect on the direction of Black Mammoth i.e., Black Mammoth and First National go up and down completely randomly.

Pair Corralation between Black Mammoth and First National

Assuming the 90 days horizon Black Mammoth Metals is expected to under-perform the First National. In addition to that, Black Mammoth is 3.19 times more volatile than First National Financial. It trades about -0.02 of its total potential returns per unit of risk. First National Financial is currently generating about 0.16 per unit of volatility. If you would invest  1,452  in First National Financial on April 21, 2025 and sell it today you would earn a total of  193.00  from holding First National Financial or generate 13.29% return on investment over 90 days.

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

Black Mammoth Metals  vs.  First National Financial

Black Mammoth Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Black Mammoth Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Black Mammoth is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

First National Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First National Financial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, First National unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Black Mammoth and First National

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

The idea behind Black Mammoth Metals and First National Financial 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.