Correlation Between FIRST SHIP and CVB Financial

Can any of the company-specific risk be diversified away by investing in both FIRST SHIP and CVB Financial 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 SHIP and CVB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FIRST SHIP LEASE and CVB Financial Corp, you can compare the effects of market volatilities on FIRST SHIP and CVB Financial 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 SHIP with a short position of CVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and CVB Financial.

Diversification Opportunities for FIRST SHIP and CVB Financial

0.33

Correlation Coefficient

FIRST SHIP  CVB Financial

Weak diversification

The 3 months correlation between FIRST and CVB is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and CVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVB Financial Corp and FIRST SHIP 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 SHIP LEASE are associated (or correlated) with CVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVB Financial Corp has no effect on the direction of FIRST SHIP i.e., FIRST SHIP and CVB Financial go up and down completely randomly.

Pair Corralation between FIRST SHIP and CVB Financial

Assuming the 90 days horizon FIRST SHIP LEASE is expected to generate 5.38 times more return on investment than CVB Financial. However, FIRST SHIP is 5.38 times more volatile than CVB Financial Corp. It trades about 0.05 of its potential returns per unit of risk. CVB Financial Corp is currently generating about 0.02 per unit of risk. If you would invest  2.21  in FIRST SHIP LEASE on April 18, 2025 and sell it today you would lose (0.46) from holding FIRST SHIP LEASE or give up 20.81% of portfolio value over 90 days.

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

FIRST SHIP LEASE  vs.  CVB Financial Corp

FIRST SHIP LEASE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FIRST SHIP LEASE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FIRST SHIP may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CVB Financial Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CVB Financial Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CVB Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FIRST SHIP and CVB Financial

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

The idea behind FIRST SHIP LEASE and CVB Financial Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.