Correlation Between Inovalis Real and First Community

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

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

Diversification Opportunities for Inovalis Real and First Community

0.22

Correlation Coefficient

Inovalis Real  First Community

Modest diversification

The 3 months correlation between Inovalis and First is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Inovalis Real Estate and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community and Inovalis Real 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 Inovalis Real Estate are associated (or correlated) with First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community has no effect on the direction of Inovalis Real i.e., Inovalis Real and First Community go up and down completely randomly.

Pair Corralation between Inovalis Real and First Community

Assuming the 90 days horizon Inovalis Real is expected to generate 1.62 times less return on investment than First Community. In addition to that, Inovalis Real is 2.82 times more volatile than First Community. It trades about 0.02 of its total potential returns per unit of risk. First Community is currently generating about 0.08 per unit of volatility. If you would invest  949.00  in First Community on August 9, 2025 and sell it today you would earn a total of  336.00  from holding First Community or generate 35.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	76.74%
Values	Daily Returns

Inovalis Real Estate  vs.  First Community

Inovalis Real Estate

Risk-Adjusted Performance

Weakest

Over the last 90 days Inovalis Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

First Community

Risk-Adjusted Performance

Solid

Over the last 90 days First Community has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, First Community is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Inovalis Real and First Community

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

The idea behind Inovalis Real Estate 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.