Correlation Between First Community and FNB
Can any of the company-specific risk be diversified away by investing in both First Community and FNB 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 FNB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Community Financial and FNB Inc, you can compare the effects of market volatilities on First Community and FNB 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 FNB. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and FNB.
Diversification Opportunities for First Community and FNB
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and FNB is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding First Community Financial and FNB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB Inc 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 Financial are associated (or correlated) with FNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB Inc has no effect on the direction of First Community i.e., First Community and FNB go up and down completely randomly.
Pair Corralation between First Community and FNB
Given the investment horizon of 90 days First Community Financial is expected to generate 2.41 times more return on investment than FNB. However, First Community is 2.41 times more volatile than FNB Inc. It trades about -0.06 of its potential returns per unit of risk. FNB Inc is currently generating about -0.15 per unit of risk. If you would invest 1,151 in First Community Financial on December 5, 2024 and sell it today you would lose (106.00) from holding First Community Financial or give up 9.21% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 77.97% |
Values | Daily Returns |
First Community Financial vs. FNB Inc
Performance |
Timeline |
First Community Financial |
FNB Inc |
First Community and FNB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Community and FNB
The main advantage of trading using opposite First Community and FNB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community position performs unexpectedly, FNB 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 FNB will offset losses from the drop in FNB's long position.First Community vs. CCSB Financial Corp | First Community vs. Bank of Utica | First Community vs. BEO Bancorp | First Community vs. First Community |
FNB vs. Century Financial Corp | FNB vs. Apollo Bancorp | FNB vs. Commercial National Financial | FNB vs. Eastern Michigan Financial |
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.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Transaction History View history of all your transactions and understand their impact on performance | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |