Correlation Between BEO Bancorp and First Ottawa
Can any of the company-specific risk be diversified away by investing in both BEO Bancorp and First Ottawa 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 BEO Bancorp and First Ottawa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEO Bancorp and First Ottawa Bancshares, you can compare the effects of market volatilities on BEO Bancorp and First Ottawa 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 BEO Bancorp with a short position of First Ottawa. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEO Bancorp and First Ottawa.
Diversification Opportunities for BEO Bancorp and First Ottawa
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BEO and First is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding BEO Bancorp and First Ottawa Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ottawa Bancshares and BEO 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 BEO Bancorp are associated (or correlated) with First Ottawa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ottawa Bancshares has no effect on the direction of BEO Bancorp i.e., BEO Bancorp and First Ottawa go up and down completely randomly.
Pair Corralation between BEO Bancorp and First Ottawa
Given the investment horizon of 90 days BEO Bancorp is expected to generate 1.21 times more return on investment than First Ottawa. However, BEO Bancorp is 1.21 times more volatile than First Ottawa Bancshares. It trades about 0.08 of its potential returns per unit of risk. First Ottawa Bancshares is currently generating about 0.04 per unit of risk. If you would invest 4,011 in BEO Bancorp on August 25, 2024 and sell it today you would earn a total of 3,505 from holding BEO Bancorp or generate 87.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.55% |
| Values | Daily Returns |
BEO Bancorp vs. First Ottawa Bancshares
Performance |
| Timeline |
| BEO Bancorp |
| First Ottawa Bancshares |
BEO Bancorp and First Ottawa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEO Bancorp and First Ottawa
The main advantage of trading using opposite BEO Bancorp and First Ottawa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEO Bancorp position performs unexpectedly, First Ottawa 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 Ottawa will offset losses from the drop in First Ottawa's long position.| BEO Bancorp vs. CCSB Financial Corp | BEO Bancorp vs. Delhi Bank Corp | BEO Bancorp vs. First Community Financial | BEO Bancorp vs. First Community |
| First Ottawa vs. Century Next Financial | First Ottawa vs. Citizens Financial Corp | First Ottawa vs. Triad Business Bank | First Ottawa vs. First Bankers Trustshares |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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