Correlation Between Sierra Bancorp and First Financial
Can any of the company-specific risk be diversified away by investing in both Sierra Bancorp and First Financial 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 Sierra Bancorp and First Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sierra Bancorp and First Financial Bankshares, you can compare the effects of market volatilities on Sierra Bancorp and First Financial 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 Sierra Bancorp with a short position of First Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra Bancorp and First Financial.
Diversification Opportunities for Sierra Bancorp and First Financial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sierra and First is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sierra Bancorp and First Financial Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Financial Bank and Sierra 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 Sierra Bancorp are associated (or correlated) with First Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Financial Bank has no effect on the direction of Sierra Bancorp i.e., Sierra Bancorp and First Financial go up and down completely randomly.
Pair Corralation between Sierra Bancorp and First Financial
Given the investment horizon of 90 days Sierra Bancorp is expected to generate 1.26 times more return on investment than First Financial. However, Sierra Bancorp is 1.26 times more volatile than First Financial Bankshares. It trades about 0.04 of its potential returns per unit of risk. First Financial Bankshares is currently generating about 0.01 per unit of risk. If you would invest 2,776 in Sierra Bancorp on October 22, 2024 and sell it today you would earn a total of 161.00 from holding Sierra Bancorp or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sierra Bancorp vs. First Financial Bankshares
Performance |
| Timeline |
| Sierra Bancorp |
| First Financial Bank |
Sierra Bancorp and First Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra Bancorp and First Financial
The main advantage of trading using opposite Sierra Bancorp and First Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra Bancorp position performs unexpectedly, First Financial 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 Financial will offset losses from the drop in First Financial's long position.| Sierra Bancorp vs. Home Federal Bancorp | Sierra Bancorp vs. First Financial Northwest | Sierra Bancorp vs. First Northwest Bancorp | Sierra Bancorp vs. First Capital |
| First Financial vs. BOK Financial | First Financial vs. Auburn National Bancorporation | First Financial vs. Great Southern Bancorp | First Financial vs. First Guaranty 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |