Correlation Between Bank of San and 1st Capital
Can any of the company-specific risk be diversified away by investing in both Bank of San and 1st Capital 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 Bank of San and 1st Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of San and 1st Capital Bank, you can compare the effects of market volatilities on Bank of San and 1st Capital 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 Bank of San with a short position of 1st Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of San and 1st Capital.
Diversification Opportunities for Bank of San and 1st Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and 1st is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of San and 1st Capital Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1st Capital Bank and Bank of San 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 Bank of San are associated (or correlated) with 1st Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1st Capital Bank has no effect on the direction of Bank of San i.e., Bank of San and 1st Capital go up and down completely randomly.
Pair Corralation between Bank of San and 1st Capital
Given the investment horizon of 90 days Bank of San is expected to generate 2.6 times less return on investment than 1st Capital. But when comparing it to its historical volatility, Bank of San is 1.62 times less risky than 1st Capital. It trades about 0.02 of its potential returns per unit of risk. 1st Capital Bank is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,165 in 1st Capital Bank on November 5, 2024 and sell it today you would earn a total of 235.00 from holding 1st Capital Bank or generate 20.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 60.32% |
| Values | Daily Returns |
Bank of San vs. 1st Capital Bank
Performance |
| Timeline |
| Bank of San |
| 1st Capital Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of San and 1st Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of San and 1st Capital
The main advantage of trading using opposite Bank of San and 1st Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of San position performs unexpectedly, 1st Capital 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 1st Capital will offset losses from the drop in 1st Capital's long position.| Bank of San vs. Pioneer Bankcorp | Bank of San vs. Liberty Northwest Bancorp | Bank of San vs. Summit Bancshares | Bank of San vs. National Capital Bank |
| 1st Capital vs. Pacific Valley Bank | 1st Capital vs. Pinnacle Bank | 1st Capital vs. Santa Cruz County | 1st Capital vs. First Northern Community |
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 Stocks Directory module to find actively traded stocks across global markets.
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