Correlation Between First Reliance and 1st Colonial

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Can any of the company-specific risk be diversified away by investing in both First Reliance and 1st Colonial 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 Reliance and 1st Colonial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Reliance Bancshares and 1st Colonial Bancorp, you can compare the effects of market volatilities on First Reliance and 1st Colonial 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 Reliance with a short position of 1st Colonial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Reliance and 1st Colonial.

Diversification Opportunities for First Reliance and 1st Colonial

First1stDiversified AwayFirst1stDiversified Away100%
-0.13
  Correlation Coefficient

Good diversification

The 3 months correlation between First and 1st is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding First Reliance Bancshares and 1st Colonial Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1st Colonial Bancorp and First Reliance 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 Reliance Bancshares are associated (or correlated) with 1st Colonial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1st Colonial Bancorp has no effect on the direction of First Reliance i.e., First Reliance and 1st Colonial go up and down completely randomly.

Pair Corralation between First Reliance and 1st Colonial

Given the investment horizon of 90 days First Reliance Bancshares is expected to under-perform the 1st Colonial. In addition to that, First Reliance is 1.52 times more volatile than 1st Colonial Bancorp. It trades about -0.02 of its total potential returns per unit of risk. 1st Colonial Bancorp is currently generating about 0.05 per unit of volatility. If you would invest  1,480  in 1st Colonial Bancorp on November 15, 2024 and sell it today you would earn a total of  24.00  from holding 1st Colonial Bancorp or generate 1.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

First Reliance Bancshares  vs.  1st Colonial Bancorp

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -4-3-2-1012
JavaScript chart by amCharts 3.21.15FSRL FCOB
       Timeline  
First Reliance Bancshares 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days First Reliance Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, First Reliance is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9.29.39.49.59.69.79.89.910
1st Colonial Bancorp 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in 1st Colonial Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 1st Colonial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb14.414.614.81515.215.4

First Reliance and 1st Colonial Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.97-2.22-1.48-0.730.010.741.492.253.0 0.20.40.60.8
JavaScript chart by amCharts 3.21.15FSRL FCOB
       Returns  

Pair Trading with First Reliance and 1st Colonial

The main advantage of trading using opposite First Reliance and 1st Colonial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Reliance position performs unexpectedly, 1st Colonial 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 1st Colonial will offset losses from the drop in 1st Colonial's long position.
The idea behind First Reliance Bancshares and 1st Colonial Bancorp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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