Correlation Between First Reliance and F M

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both First Reliance and F M 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 F M 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 F M Bank, you can compare the effects of market volatilities on First Reliance and F M 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 F M. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Reliance and F M.

Diversification Opportunities for First Reliance and F M

FirstFMBMDiversified AwayFirstFMBMDiversified Away100%
0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between First and FMBM is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding First Reliance Bancshares and F M Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on F M 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 F M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of F M Bank has no effect on the direction of First Reliance i.e., First Reliance and F M go up and down completely randomly.

Pair Corralation between First Reliance and F M

Given the investment horizon of 90 days First Reliance Bancshares is expected to generate 0.84 times more return on investment than F M. However, First Reliance Bancshares is 1.19 times less risky than F M. It trades about -0.02 of its potential returns per unit of risk. F M Bank is currently generating about -0.08 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 Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

First Reliance Bancshares  vs.  F M Bank

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -10-8-6-4-202
JavaScript chart by amCharts 3.21.15FSRL FMBM
       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
F M Bank 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days F M Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, F M is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb19.52020.52121.522

First Reliance and F M Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.97-2.22-1.48-0.730.00.741.492.253.0 0.10.20.30.4
JavaScript chart by amCharts 3.21.15FSRL FMBM
       Returns  

Pair Trading with First Reliance and F M

The main advantage of trading using opposite First Reliance and F M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Reliance position performs unexpectedly, F M 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 F M will offset losses from the drop in F M's long position.
The idea behind First Reliance Bancshares and F M Bank 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.
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios