Correlation Between TC Bancshares and 1st Source

Can any of the company-specific risk be diversified away by investing in both TC Bancshares and 1st Source 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 TC Bancshares and 1st Source into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TC Bancshares and 1st Source, you can compare the effects of market volatilities on TC Bancshares and 1st Source 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 TC Bancshares with a short position of 1st Source. Check out your portfolio center. Please also check ongoing floating volatility patterns of TC Bancshares and 1st Source.

Diversification Opportunities for TC Bancshares and 1st Source

0.11

Correlation Coefficient

TC Bancshares  1st Source

Average diversification

The 3 months correlation between TCBC and 1st is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding TC Bancshares and 1st Source in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1st Source and TC 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 TC Bancshares are associated (or correlated) with 1st Source. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1st Source has no effect on the direction of TC Bancshares i.e., TC Bancshares and 1st Source go up and down completely randomly.

Pair Corralation between TC Bancshares and 1st Source

If you would invest  1,341  in TC Bancshares on September 24, 2024 and sell it today you would earn a total of  0.00  from holding TC Bancshares or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

TC Bancshares  vs.  1st Source

TC Bancshares

Risk-Adjusted Performance

0 of 100

Very Weak

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

1st Source

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 1st Source are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, 1st Source is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with TC Bancshares and 1st Source

The main advantage of trading using opposite TC Bancshares and 1st Source positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TC Bancshares position performs unexpectedly, 1st Source 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 1st Source will offset losses from the drop in 1st Source's long position.

The idea behind TC Bancshares and 1st Source 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.