Correlation Between First National and Fiera Capital

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

By analyzing existing cross correlation between First National Financial and Fiera Capital, you can compare the effects of market volatilities on First National and Fiera Capital 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 Fiera Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and Fiera Capital.

Diversification Opportunities for First National and Fiera Capital

0.69

Correlation Coefficient

First National  Fiera Capital

Poor diversification

The 3 months correlation between First and Fiera is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding First National Financial and Fiera Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiera Capital 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 Financial are associated (or correlated) with Fiera Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiera Capital has no effect on the direction of First National i.e., First National and Fiera Capital go up and down completely randomly.

Pair Corralation between First National and Fiera Capital

Assuming the 90 days horizon First National is expected to generate 1.63 times less return on investment than Fiera Capital. But when comparing it to its historical volatility, First National Financial is 2.11 times less risky than Fiera Capital. It trades about 0.15 of its potential returns per unit of risk. Fiera Capital is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  604.00  in Fiera Capital on April 22, 2025 and sell it today you would earn a total of  97.00  from holding Fiera Capital or generate 16.06% return on investment over 90 days.

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

First National Financial  vs.  Fiera Capital

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 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, First National may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Fiera Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fiera Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fiera Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First National and Fiera Capital

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

The idea behind First National Financial and Fiera Capital 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.