Correlation Between BOK Financial and First Community
Can any of the company-specific risk be diversified away by investing in both BOK Financial and First Community 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 BOK Financial and First Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOK Financial and First Community, you can compare the effects of market volatilities on BOK Financial and First Community 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 BOK Financial with a short position of First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOK Financial and First Community.
Diversification Opportunities for BOK Financial and First Community
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BOK and First is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding BOK Financial and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community and BOK Financial 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 BOK Financial are associated (or correlated) with First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community has no effect on the direction of BOK Financial i.e., BOK Financial and First Community go up and down completely randomly.
Pair Corralation between BOK Financial and First Community
Given the investment horizon of 90 days BOK Financial is expected to generate 13.83 times less return on investment than First Community. But when comparing it to its historical volatility, BOK Financial is 1.17 times less risky than First Community. It trades about 0.01 of its potential returns per unit of risk. First Community is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,499 in First Community on September 12, 2024 and sell it today you would earn a total of 69.00 from holding First Community or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOK Financial vs. First Community
Performance |
| Timeline |
| BOK Financial |
| First Community |
BOK Financial and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOK Financial and First Community
The main advantage of trading using opposite BOK Financial and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOK Financial position performs unexpectedly, First Community 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 Community will offset losses from the drop in First Community's long position.| BOK Financial vs. First Financial Bankshares | BOK Financial vs. Auburn National Bancorporation | BOK Financial vs. Great Southern Bancorp | BOK Financial vs. First Guaranty Bancshares |
| First Community vs. Community West Bancshares | First Community vs. First Financial Northwest | First Community vs. First Northwest Bancorp | First Community vs. Home Federal 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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