Correlation Between Killbuck Bancshares and First Capital

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

Diversification Opportunities for Killbuck Bancshares and First Capital

0.13
  Correlation Coefficient

Average diversification

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

Pair Corralation between Killbuck Bancshares and First Capital

Given the investment horizon of 90 days Killbuck Bancshares is expected to under-perform the First Capital. In addition to that, Killbuck Bancshares is 1.94 times more volatile than First Capital. It trades about -0.01 of its total potential returns per unit of risk. First Capital is currently generating about 0.03 per unit of volatility. If you would invest  2,542  in First Capital on October 4, 2024 and sell it today you would earn a total of  683.00  from holding First Capital or generate 26.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy65.37%
ValuesDaily Returns

Killbuck Bancshares  vs.  First Capital

 Performance 
       Timeline  
Killbuck Bancshares 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Killbuck Bancshares are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Killbuck Bancshares is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
First Capital 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days First Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Killbuck Bancshares and First Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Killbuck Bancshares and First Capital

The main advantage of trading using opposite Killbuck Bancshares and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Killbuck Bancshares position performs unexpectedly, First 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 First Capital will offset losses from the drop in First Capital's long position.
The idea behind Killbuck Bancshares and First Capital 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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