Correlation Between BancFirst and Commerce Bancshares
Can any of the company-specific risk be diversified away by investing in both BancFirst and Commerce 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 BancFirst and Commerce Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BancFirst and Commerce Bancshares, you can compare the effects of market volatilities on BancFirst and Commerce 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 BancFirst with a short position of Commerce Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of BancFirst and Commerce Bancshares.
Diversification Opportunities for BancFirst and Commerce Bancshares
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BancFirst and Commerce is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding BancFirst and Commerce Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce Bancshares and BancFirst 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 BancFirst are associated (or correlated) with Commerce Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Bancshares has no effect on the direction of BancFirst i.e., BancFirst and Commerce Bancshares go up and down completely randomly.
Pair Corralation between BancFirst and Commerce Bancshares
Given the investment horizon of 90 days BancFirst is expected to generate 1.42 times more return on investment than Commerce Bancshares. However, BancFirst is 1.42 times more volatile than Commerce Bancshares. It trades about 0.07 of its potential returns per unit of risk. Commerce Bancshares is currently generating about 0.09 per unit of risk. If you would invest 8,672 in BancFirst on November 9, 2024 and sell it today you would earn a total of 3,647 from holding BancFirst or generate 42.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BancFirst vs. Commerce Bancshares
Performance |
| Timeline |
| BancFirst |
| Commerce Bancshares |
BancFirst and Commerce Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BancFirst and Commerce Bancshares
The main advantage of trading using opposite BancFirst and Commerce Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BancFirst position performs unexpectedly, Commerce 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 Commerce Bancshares will offset losses from the drop in Commerce Bancshares' long position.| BancFirst vs. Glacier Bancorp | BancFirst vs. BOK Financial | BancFirst vs. First Financial Bancorp | BancFirst vs. First Bancorp |
| Commerce Bancshares vs. BOK Financial | Commerce Bancshares vs. Texas Capital Bancshares | Commerce Bancshares vs. United Bankshares | Commerce Bancshares vs. Prosperity 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |