Correlation Between Associated Banc and First Guaranty
Can any of the company-specific risk be diversified away by investing in both Associated Banc and First Guaranty 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 Associated Banc and First Guaranty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Banc Corp and First Guaranty Bancshares, you can compare the effects of market volatilities on Associated Banc and First Guaranty 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 Associated Banc with a short position of First Guaranty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Banc and First Guaranty.
Diversification Opportunities for Associated Banc and First Guaranty
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Associated and First is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Associated Banc Corp and First Guaranty Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Guaranty Bancshares and Associated Banc 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 Associated Banc Corp are associated (or correlated) with First Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Guaranty Bancshares has no effect on the direction of Associated Banc i.e., Associated Banc and First Guaranty go up and down completely randomly.
Pair Corralation between Associated Banc and First Guaranty
Assuming the 90 days trading horizon Associated Banc is expected to generate 1.51 times less return on investment than First Guaranty. But when comparing it to its historical volatility, Associated Banc Corp is 1.65 times less risky than First Guaranty. It trades about 0.02 of its potential returns per unit of risk. First Guaranty Bancshares is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,085 in First Guaranty Bancshares on August 23, 2024 and sell it today you would earn a total of 129.00 from holding First Guaranty Bancshares or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Banc Corp vs. First Guaranty Bancshares
Performance |
| Timeline |
| Associated Banc Corp |
| First Guaranty Bancshares |
Associated Banc and First Guaranty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Banc and First Guaranty
The main advantage of trading using opposite Associated Banc and First Guaranty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Banc position performs unexpectedly, First Guaranty 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 Guaranty will offset losses from the drop in First Guaranty's long position.| Associated Banc vs. Truist Financial | Associated Banc vs. US Bancorp | Associated Banc vs. Truist Financial | Associated Banc vs. MetLife Preferred Stock |
| First Guaranty vs. CNB Financial | First Guaranty vs. First Citizens BancShares | First Guaranty vs. Texas Capital Bancshares | First Guaranty vs. Merchants Bancorp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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