Correlation Between Harbor Bankshares and BankFirst Capital
Can any of the company-specific risk be diversified away by investing in both Harbor Bankshares and BankFirst Capital 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 Harbor Bankshares and BankFirst Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harbor Bankshares and BankFirst Capital, you can compare the effects of market volatilities on Harbor Bankshares and BankFirst Capital 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 Harbor Bankshares with a short position of BankFirst Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Bankshares and BankFirst Capital.
Diversification Opportunities for Harbor Bankshares and BankFirst Capital
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Harbor and BankFirst is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Bankshares and BankFirst Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankFirst Capital and Harbor Bankshares 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 Harbor Bankshares are associated (or correlated) with BankFirst Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankFirst Capital has no effect on the direction of Harbor Bankshares i.e., Harbor Bankshares and BankFirst Capital go up and down completely randomly.
Pair Corralation between Harbor Bankshares and BankFirst Capital
Given the investment horizon of 90 days Harbor Bankshares is expected to generate 13.58 times more return on investment than BankFirst Capital. However, Harbor Bankshares is 13.58 times more volatile than BankFirst Capital. It trades about 0.34 of its potential returns per unit of risk. BankFirst Capital is currently generating about -0.09 per unit of risk. If you would invest 1,303 in Harbor Bankshares on October 25, 2024 and sell it today you would earn a total of 647.00 from holding Harbor Bankshares or generate 49.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Harbor Bankshares vs. BankFirst Capital
Performance |
Timeline |
Harbor Bankshares |
BankFirst Capital |
Harbor Bankshares and BankFirst Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harbor Bankshares and BankFirst Capital
The main advantage of trading using opposite Harbor Bankshares and BankFirst Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Bankshares position performs unexpectedly, BankFirst Capital 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 BankFirst Capital will offset losses from the drop in BankFirst Capital's long position.Harbor Bankshares vs. MNB Holdings Corp | Harbor Bankshares vs. Oconee Financial | Harbor Bankshares vs. Mission Valley Bancorp | Harbor Bankshares vs. Merchants Marine Bancorp |
BankFirst Capital vs. Harbor Bankshares | BankFirst Capital vs. Citizens Bancshares Corp | BankFirst Capital vs. Security Federal | BankFirst Capital vs. MF Bancorp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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