Correlation Between Oconee Federal and BancFirst

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

By analyzing existing cross correlation between Oconee Federal Financial and BancFirst, you can compare the effects of market volatilities on Oconee Federal and BancFirst 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 Oconee Federal with a short position of BancFirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oconee Federal and BancFirst.

Diversification Opportunities for Oconee Federal and BancFirst

-0.84

Correlation Coefficient

Oconee Federal  BancFirst

Pay attention - limited upside

The 3 months correlation between Oconee and BancFirst is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Oconee Federal Financial and BancFirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BancFirst and Oconee Federal 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 Oconee Federal Financial are associated (or correlated) with BancFirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BancFirst has no effect on the direction of Oconee Federal i.e., Oconee Federal and BancFirst go up and down completely randomly.

Pair Corralation between Oconee Federal and BancFirst

If you would invest  10,513  in BancFirst on September 15, 2024 and sell it today you would earn a total of  2,025  from holding BancFirst or generate 19.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Oconee Federal Financial  vs.  BancFirst

Oconee Federal Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oconee Federal Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Oconee Federal is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

BancFirst

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BancFirst are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, BancFirst reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oconee Federal and BancFirst

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

The idea behind Oconee Federal Financial and BancFirst 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.