Correlation Between First Horizon and Brandywineglobal

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

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

Diversification Opportunities for First Horizon and Brandywineglobal

0.64

Correlation Coefficient

First Horizon  Brandywineglobal

Poor diversification

The 3 months correlation between First and Brandywineglobal is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding First Horizon National and Brandywineglobal Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandywineglobal C and First Horizon 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 Horizon National are associated (or correlated) with Brandywineglobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandywineglobal C has no effect on the direction of First Horizon i.e., First Horizon and Brandywineglobal go up and down completely randomly.

Pair Corralation between First Horizon and Brandywineglobal

Considering the 90-day investment horizon First Horizon National is expected to under-perform the Brandywineglobal. In addition to that, First Horizon is 8.1 times more volatile than Brandywineglobal Corporate. It trades about -0.17 of its total potential returns per unit of risk. Brandywineglobal Corporate is currently generating about -0.15 per unit of volatility. If you would invest  1,047  in Brandywineglobal Corporate on January 20, 2024 and sell it today you would lose (7.00) from holding Brandywineglobal Corporate or give up 0.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

First Horizon National  vs.  Brandywineglobal Corporate

First Horizon National

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Horizon National are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical indicators, First Horizon is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Brandywineglobal C

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brandywineglobal Corporate are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Brandywineglobal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Horizon and Brandywineglobal

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

The idea behind First Horizon National and Brandywineglobal Corporate 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.