Correlation Between Tectonic Financial and First Hawaiian

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

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

Diversification Opportunities for Tectonic Financial and First Hawaiian

-0.67

Correlation Coefficient

Tectonic Financial  First Hawaiian

Excellent diversification

The 3 months correlation between Tectonic and First is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR and First Hawaiian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hawaiian and Tectonic Financial 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 Tectonic Financial PR are associated (or correlated) with First Hawaiian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hawaiian has no effect on the direction of Tectonic Financial i.e., Tectonic Financial and First Hawaiian go up and down completely randomly.

Pair Corralation between Tectonic Financial and First Hawaiian

Assuming the 90 days horizon Tectonic Financial is expected to generate 6.12 times less return on investment than First Hawaiian. But when comparing it to its historical volatility, Tectonic Financial PR is 3.28 times less risky than First Hawaiian. It trades about 0.03 of its potential returns per unit of risk. First Hawaiian is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,266  in First Hawaiian on February 2, 2025 and sell it today you would earn a total of  60.00  from holding First Hawaiian or generate 2.65% return on investment over 90 days.

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

Tectonic Financial PR  vs.  First Hawaiian

Tectonic Financial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tectonic Financial PR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Tectonic Financial is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

First Hawaiian

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Hawaiian has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical indicators remain somewhat strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Tectonic Financial and First Hawaiian

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

The idea behind Tectonic Financial PR and First Hawaiian 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.