Correlation Between Investar Holding and First Bancshares,

Can any of the company-specific risk be diversified away by investing in both Investar Holding and First Bancshares, 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 Investar Holding and First Bancshares, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Investar Holding Corp and The First Bancshares,, you can compare the effects of market volatilities on Investar Holding and First Bancshares, 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 Investar Holding with a short position of First Bancshares,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investar Holding and First Bancshares,.

Diversification Opportunities for Investar Holding and First Bancshares,

0.07

Correlation Coefficient

Investar Holding  First Bancshares,

Significant diversification

The 3 months correlation between Investar and First is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Investar Holding Corp and The First Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancshares, and Investar Holding 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 Investar Holding Corp are associated (or correlated) with First Bancshares,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancshares, has no effect on the direction of Investar Holding i.e., Investar Holding and First Bancshares, go up and down completely randomly.

Pair Corralation between Investar Holding and First Bancshares,

Given the investment horizon of 90 days Investar Holding Corp is expected to under-perform the First Bancshares,. But the stock apears to be less risky and, when comparing its historical volatility, Investar Holding Corp is 1.01 times less risky than First Bancshares,. The stock trades about -0.2 of its potential returns per unit of risk. The The First Bancshares, is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,478  in The First Bancshares, on December 29, 2024 and sell it today you would earn a total of  27.00  from holding The First Bancshares, or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Investar Holding Corp  vs.  The First Bancshares,

Investar Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Investar Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

First Bancshares,

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The First Bancshares, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, First Bancshares, is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Investar Holding and First Bancshares,

The main advantage of trading using opposite Investar Holding and First Bancshares, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investar Holding position performs unexpectedly, First Bancshares, 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 First Bancshares, will offset losses from the drop in First Bancshares,'s long position.

The idea behind Investar Holding Corp and The First Bancshares, 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.