Correlation Between ST Bancorp and First Bancshares,

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

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

Diversification Opportunities for ST Bancorp and First Bancshares,

0.54

Correlation Coefficient

ST Bancorp  First Bancshares,

Very weak diversification

The 3 months correlation between STBA and First is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ST Bancorp and The First Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancshares, and ST 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 ST Bancorp 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 ST Bancorp i.e., ST Bancorp and First Bancshares, go up and down completely randomly.

Pair Corralation between ST Bancorp and First Bancshares,

Given the investment horizon of 90 days ST Bancorp is expected to generate 2.83 times less return on investment than First Bancshares,. But when comparing it to its historical volatility, ST Bancorp is 1.01 times less risky than First Bancshares,. It trades about 0.03 of its potential returns per unit of risk. The First Bancshares, is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,366  in The First Bancshares, on August 31, 2024 and sell it today you would earn a total of  377.00  from holding The First Bancshares, or generate 11.2% return on investment over 90 days.

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

ST Bancorp  vs.  The First Bancshares,

ST Bancorp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ST Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, ST Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

First Bancshares,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The First Bancshares, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, First Bancshares, may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with ST Bancorp and First Bancshares,

The main advantage of trading using opposite ST Bancorp and First Bancshares, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ST Bancorp 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 ST Bancorp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.