Correlation Between First Financial and Bank Utica

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

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

Diversification Opportunities for First Financial and Bank Utica

-0.46

Correlation Coefficient

First Financial  Bank Utica

Very good diversification

The 3 months correlation between First and Bank is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding First Financial Northwest and Bank Utica Ny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Utica Ny and First 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 First Financial Northwest are associated (or correlated) with Bank Utica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Utica Ny has no effect on the direction of First Financial i.e., First Financial and Bank Utica go up and down completely randomly.

Pair Corralation between First Financial and Bank Utica

Given the investment horizon of 90 days First Financial is expected to generate 1.39 times less return on investment than Bank Utica. But when comparing it to its historical volatility, First Financial Northwest is 1.52 times less risky than Bank Utica. It trades about 0.04 of its potential returns per unit of risk. Bank Utica Ny is currently generating about 0.04 of returns per unit of risk over similar time horizon. 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	Very Weak
Accuracy	91.13%
Values	Daily Returns

First Financial Northwest  vs.  Bank Utica Ny

First Financial Northwest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Financial Northwest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, First Financial is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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.

Pair Trading with First Financial and Bank Utica

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

The idea behind First Financial Northwest and Bank Utica Ny 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.