Correlation Between First Bankers and CCCB Bancorp
Can any of the company-specific risk be diversified away by investing in both First Bankers and CCCB Bancorp 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 Bankers and CCCB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Bankers Trustshares and CCCB Bancorp, you can compare the effects of market volatilities on First Bankers and CCCB Bancorp 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 Bankers with a short position of CCCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bankers and CCCB Bancorp.
Diversification Opportunities for First Bankers and CCCB Bancorp
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and CCCB is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding First Bankers Trustshares and CCCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCCB Bancorp and First Bankers 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 Bankers Trustshares are associated (or correlated) with CCCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCCB Bancorp has no effect on the direction of First Bankers i.e., First Bankers and CCCB Bancorp go up and down completely randomly.
Pair Corralation between First Bankers and CCCB Bancorp
Given the investment horizon of 90 days First Bankers Trustshares is expected to generate 0.44 times more return on investment than CCCB Bancorp. However, First Bankers Trustshares is 2.28 times less risky than CCCB Bancorp. It trades about -0.06 of its potential returns per unit of risk. CCCB Bancorp is currently generating about -0.04 per unit of risk. If you would invest 1,677 in First Bankers Trustshares on December 26, 2024 and sell it today you would lose (38.00) from holding First Bankers Trustshares or give up 2.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.0% |
Values | Daily Returns |
First Bankers Trustshares vs. CCCB Bancorp
Performance |
Timeline |
First Bankers Trustshares |
CCCB Bancorp |
First Bankers and CCCB Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Bankers and CCCB Bancorp
The main advantage of trading using opposite First Bankers and CCCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bankers position performs unexpectedly, CCCB Bancorp 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 CCCB Bancorp will offset losses from the drop in CCCB Bancorp's long position.First Bankers vs. Greenville Federal Financial | First Bankers vs. First Ottawa Bancshares | First Bankers vs. Coastal Carolina Bancshares | First Bankers vs. Citizens Bancorp Investment |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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