Correlation Between First Capital and Origin Bancorp

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

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

Diversification Opportunities for First Capital and Origin Bancorp

0.0

Correlation Coefficient

First Capital  Origin Bancorp

Pay attention - limited upside

The 3 months correlation between First and Origin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Capital and Origin Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Bancorp and First Capital 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 Capital are associated (or correlated) with Origin Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Bancorp has no effect on the direction of First Capital i.e., First Capital and Origin Bancorp go up and down completely randomly.

Pair Corralation between First Capital and Origin Bancorp

If you would invest  3,129  in First Capital on December 21, 2024 and sell it today you would earn a total of  678.00  from holding First Capital or generate 21.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

First Capital  vs.  Origin Bancorp

First Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Capital are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, First Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Origin Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Origin Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Origin Bancorp is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with First Capital and Origin Bancorp

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

The idea behind First Capital and Origin Bancorp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.