Correlation Between Camden National and First Community
Can any of the company-specific risk be diversified away by investing in both Camden National 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 Camden National and First Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camden National and First Community, you can compare the effects of market volatilities on Camden National 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 Camden National with a short position of First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camden National and First Community.
Diversification Opportunities for Camden National and First Community
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Camden and First is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Camden National and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community and Camden National 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 Camden National 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 Camden National i.e., Camden National and First Community go up and down completely randomly.
Pair Corralation between Camden National and First Community
Considering the 90-day investment horizon Camden National is expected to generate 0.88 times more return on investment than First Community. However, Camden National is 1.14 times less risky than First Community. It trades about -0.07 of its potential returns per unit of risk. First Community is currently generating about -0.15 per unit of risk. If you would invest 4,444 in Camden National on November 28, 2024 and sell it today you would lose (120.00) from holding Camden National or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camden National vs. First Community
Performance |
| Timeline |
| Camden National |
| First Community |
Camden National and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camden National and First Community
The main advantage of trading using opposite Camden National and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camden National 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.| Camden National vs. First United | Camden National vs. First Community | Camden National vs. Greene County Bancorp | Camden National vs. Community West 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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