Correlation Between Business First and SmartFinancial,
Can any of the company-specific risk be diversified away by investing in both Business First and SmartFinancial, 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 Business First and SmartFinancial, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Business First Bancshares and SmartFinancial,, you can compare the effects of market volatilities on Business First and SmartFinancial, 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 Business First with a short position of SmartFinancial,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Business First and SmartFinancial,.
Diversification Opportunities for Business First and SmartFinancial,
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Business and SmartFinancial, is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Business First Bancshares and SmartFinancial, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartFinancial, and Business First 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 Business First Bancshares are associated (or correlated) with SmartFinancial,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartFinancial, has no effect on the direction of Business First i.e., Business First and SmartFinancial, go up and down completely randomly.
Pair Corralation between Business First and SmartFinancial,
Given the investment horizon of 90 days Business First Bancshares is expected to generate 1.22 times more return on investment than SmartFinancial,. However, Business First is 1.22 times more volatile than SmartFinancial,. It trades about 0.03 of its potential returns per unit of risk. SmartFinancial, is currently generating about 0.04 per unit of risk. If you would invest 2,190 in Business First Bancshares on September 2, 2024 and sell it today you would earn a total of 660.00 from holding Business First Bancshares or generate 30.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Business First Bancshares vs. SmartFinancial,
Performance |
| Timeline |
| Business First Bancshares |
| SmartFinancial, |
Business First and SmartFinancial, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Business First and SmartFinancial,
The main advantage of trading using opposite Business First and SmartFinancial, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Business First position performs unexpectedly, SmartFinancial, 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 SmartFinancial, will offset losses from the drop in SmartFinancial,'s long position.| Business First vs. First Community | Business First vs. Community West Bancshares | Business First vs. First Financial Northwest | Business First vs. First Northwest Bancorp |
| SmartFinancial, vs. Home Federal Bancorp | SmartFinancial, vs. Lake Shore Bancorp | SmartFinancial, vs. Community West Bancshares | SmartFinancial, vs. First Financial Northwest |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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