Correlation Between First Hawaiian and Bank of San Francisco
Can any of the company-specific risk be diversified away by investing in both First Hawaiian and Bank of San Francisco 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 Hawaiian and Bank of San Francisco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hawaiian and Bank of San, you can compare the effects of market volatilities on First Hawaiian and Bank of San Francisco 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 Hawaiian with a short position of Bank of San Francisco. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hawaiian and Bank of San Francisco.
Diversification Opportunities for First Hawaiian and Bank of San Francisco
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Bank is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding First Hawaiian and Bank of San in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of San Francisco and First Hawaiian 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 Hawaiian are associated (or correlated) with Bank of San Francisco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of San Francisco has no effect on the direction of First Hawaiian i.e., First Hawaiian and Bank of San Francisco go up and down completely randomly.
Pair Corralation between First Hawaiian and Bank of San Francisco
Considering the 90-day investment horizon First Hawaiian is expected to under-perform the Bank of San Francisco. In addition to that, First Hawaiian is 1.17 times more volatile than Bank of San. It trades about 0.0 of its total potential returns per unit of risk. Bank of San is currently generating about 0.08 per unit of volatility. If you would invest 3,015 in Bank of San on December 1, 2024 and sell it today you would earn a total of 160.00 from holding Bank of San or generate 5.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
First Hawaiian vs. Bank of San
Performance |
Timeline |
First Hawaiian |
Bank of San Francisco |
First Hawaiian and Bank of San Francisco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Hawaiian and Bank of San Francisco
The main advantage of trading using opposite First Hawaiian and Bank of San Francisco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hawaiian position performs unexpectedly, Bank of San Francisco 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 of San Francisco will offset losses from the drop in Bank of San Francisco's long position.First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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