Correlation Between First Reliance and Freedom Bank
Can any of the company-specific risk be diversified away by investing in both First Reliance and Freedom Bank 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 Freedom Bank 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 Freedom Bank of, you can compare the effects of market volatilities on First Reliance and Freedom Bank 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 Freedom Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Reliance and Freedom Bank.
Diversification Opportunities for First Reliance and Freedom Bank
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Freedom is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding First Reliance Bancshares and Freedom Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Bank 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 Freedom Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Bank has no effect on the direction of First Reliance i.e., First Reliance and Freedom Bank go up and down completely randomly.
Pair Corralation between First Reliance and Freedom Bank
Given the investment horizon of 90 days First Reliance Bancshares is expected to generate 1.07 times more return on investment than Freedom Bank. However, First Reliance is 1.07 times more volatile than Freedom Bank of. It trades about -0.02 of its potential returns per unit of risk. Freedom Bank of is currently generating about -0.06 per unit of risk. If you would invest 1,000.00 in First Reliance Bancshares on November 15, 2024 and sell it today you would lose (11.00) from holding First Reliance Bancshares or give up 1.1% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
First Reliance Bancshares vs. Freedom Bank of
Performance |
Timeline |
First Reliance Bancshares |
Freedom Bank |
First Reliance and Freedom Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Reliance and Freedom Bank
The main advantage of trading using opposite First Reliance and Freedom Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Reliance position performs unexpectedly, Freedom Bank 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 Freedom Bank will offset losses from the drop in Freedom Bank's long position.First Reliance vs. FNB Inc | ||
First Reliance vs. Apollo Bancorp | ||
First Reliance vs. Commercial National Financial | ||
First Reliance vs. Community Bankers |
Freedom Bank vs. National Capital Bank | ||
Freedom Bank vs. Community Heritage Financial | ||
Freedom Bank vs. Citizens Financial Corp | ||
Freedom Bank vs. Bank of Idaho |
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.
Other Complementary Tools
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |