Correlation Between Bank Utica and First Capital

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

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

Diversification Opportunities for Bank Utica and First Capital

-0.81

Correlation Coefficient

Bank Utica  First Capital

Pay attention - limited upside

The 3 months correlation between Bank and First is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank Utica Ny and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital and Bank Utica 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 Bank Utica Ny are associated (or correlated) with First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of Bank Utica i.e., Bank Utica and First Capital go up and down completely randomly.

Pair Corralation between Bank Utica and First Capital

Assuming the 90 days horizon Bank Utica Ny is expected to generate 1.81 times more return on investment than First Capital. However, Bank Utica is 1.81 times more volatile than First Capital. It trades about 0.04 of its potential returns per unit of risk. First Capital is currently generating about 0.03 per unit of risk. If you would invest  34,642  in Bank Utica Ny on October 4, 2024 and sell it today you would earn a total of  14,358  from holding Bank Utica Ny or generate 41.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	92.62%
Values	Daily Returns

Bank Utica Ny  vs.  First Capital

Bank Utica Ny

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Utica Ny are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Bank Utica disclosed solid returns over the last few months and may actually be approaching a breakup point.

First Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Bank Utica and First Capital

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

The idea behind Bank Utica Ny and First 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.

Check out your portfolio center.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.