Correlation Between First Community and First Bankers
Can any of the company-specific risk be diversified away by investing in both First Community and First Bankers 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 Community and First Bankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Community and First Bankers Trustshares, you can compare the effects of market volatilities on First Community and First Bankers 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 Community with a short position of First Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and First Bankers.
Diversification Opportunities for First Community and First Bankers
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and First is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding First Community and First Bankers Trustshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bankers Trustshares and First Community 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 Community are associated (or correlated) with First Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bankers Trustshares has no effect on the direction of First Community i.e., First Community and First Bankers go up and down completely randomly.
Pair Corralation between First Community and First Bankers
Given the investment horizon of 90 days First Community is expected to generate 1.53 times more return on investment than First Bankers. However, First Community is 1.53 times more volatile than First Bankers Trustshares. It trades about -0.08 of its potential returns per unit of risk. First Bankers Trustshares is currently generating about -0.14 per unit of risk. If you would invest 880.00 in First Community on December 27, 2024 and sell it today you would lose (50.00) from holding First Community or give up 5.68% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
First Community vs. First Bankers Trustshares
Performance |
Timeline |
First Community |
First Bankers Trustshares |
First Community and First Bankers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Community and First Bankers
The main advantage of trading using opposite First Community and First Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community position performs unexpectedly, First Bankers 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 Bankers will offset losses from the drop in First Bankers' long position.First Community vs. CCSB Financial Corp | First Community vs. Delhi Bank Corp | First Community vs. BEO Bancorp | First Community vs. First Community Financial |
First Bankers vs. Greenville Federal Financial | First Bankers vs. First Ottawa Bancshares | First Bankers vs. Coastal Carolina Bancshares | First Bankers vs. Citizens Bancorp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Share Portfolio Track or share privately all of your investments from the convenience of any device |