Correlation Between FFD Financial and First Bancorp
Can any of the company-specific risk be diversified away by investing in both FFD Financial and First 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 FFD Financial and First Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FFD Financial Corp and First Bancorp, you can compare the effects of market volatilities on FFD Financial and First 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 FFD Financial with a short position of First Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FFD Financial and First Bancorp.
Diversification Opportunities for FFD Financial and First Bancorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FFD and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FFD Financial Corp and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp and FFD Financial 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 FFD Financial Corp are associated (or correlated) with First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of FFD Financial i.e., FFD Financial and First Bancorp go up and down completely randomly.
Pair Corralation between FFD Financial and First Bancorp
If you would invest (100.00) in FFD Financial Corp on December 26, 2024 and sell it today you would earn a total of 100.00 from holding FFD Financial Corp or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
FFD Financial Corp vs. First Bancorp
Performance |
Timeline |
FFD Financial Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
First Bancorp |
FFD Financial and First Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FFD Financial and First Bancorp
The main advantage of trading using opposite FFD Financial and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FFD Financial position performs unexpectedly, First 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 First Bancorp will offset losses from the drop in First Bancorp's long position.FFD Financial vs. First Bancorp | FFD Financial vs. Triumph Financial | FFD Financial vs. Northeast Bancorp | FFD Financial vs. Greene County Bancorp |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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