Correlation Between Alpha Bank and First Capital
Can any of the company-specific risk be diversified away by investing in both Alpha Bank 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 Alpha Bank and First Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Bank SA and First Capital, you can compare the effects of market volatilities on Alpha Bank 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 Alpha Bank with a short position of First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Bank and First Capital.
Diversification Opportunities for Alpha Bank and First Capital
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Alpha and First is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Bank SA and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital and Alpha Bank 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 Alpha Bank SA 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 Alpha Bank i.e., Alpha Bank and First Capital go up and down completely randomly.
Pair Corralation between Alpha Bank and First Capital
Assuming the 90 days horizon Alpha Bank SA is expected to generate 1.82 times more return on investment than First Capital. However, Alpha Bank is 1.82 times more volatile than First Capital. It trades about 0.03 of its potential returns per unit of risk. First Capital is currently generating about 0.04 per unit of risk. If you would invest 30.00 in Alpha Bank SA on October 14, 2024 and sell it today you would earn a total of 10.00 from holding Alpha Bank SA or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Alpha Bank SA vs. First Capital
Performance |
| Timeline |
| Alpha Bank SA |
| First Capital |
Alpha Bank and First Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Bank and First Capital
The main advantage of trading using opposite Alpha Bank and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Bank 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.| Alpha Bank vs. National Bank of | Alpha Bank vs. Piraeus Bank SA | Alpha Bank vs. Eurobank Ergasias SA | Alpha Bank vs. First Citizens BancShares |
| First Capital vs. Home Federal Bancorp | First Capital vs. First Financial Northwest | First Capital vs. First Northwest Bancorp | First Capital vs. Community West Bancshares |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |