Correlation Between Private Bancorp and First Citizens

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

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

Diversification Opportunities for Private Bancorp and First Citizens

0.0

Correlation Coefficient

Private Bancorp  First Citizens

Pay attention - limited upside

The 3 months correlation between Private and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Private Bancorp of and The First Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens and Private Bancorp 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 Private Bancorp of are associated (or correlated) with First Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens has no effect on the direction of Private Bancorp i.e., Private Bancorp and First Citizens go up and down completely randomly.

Pair Corralation between Private Bancorp and First Citizens

If you would invest (100.00) in The First Citizens on December 28, 2024 and sell it today you would earn a total of  100.00  from holding The First Citizens or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Private Bancorp of  vs.  The First Citizens

Private Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Private Bancorp of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Private Bancorp is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

First Citizens

Risk-Adjusted Performance

Very Weak

Over the last 90 days The First Citizens has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, First Citizens is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Private Bancorp and First Citizens

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

The idea behind Private Bancorp of and The First Citizens 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.