Correlation Between CBOA Financial and First Bancshares
Can any of the company-specific risk be diversified away by investing in both CBOA Financial and First Bancshares 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 CBOA Financial and First Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBOA Financial and First Bancshares, you can compare the effects of market volatilities on CBOA Financial and First Bancshares 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 CBOA Financial with a short position of First Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBOA Financial and First Bancshares.
Diversification Opportunities for CBOA Financial and First Bancshares
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between CBOA and First is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CBOA Financial and First Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancshares and CBOA 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 CBOA Financial are associated (or correlated) with First Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancshares has no effect on the direction of CBOA Financial i.e., CBOA Financial and First Bancshares go up and down completely randomly.
Pair Corralation between CBOA Financial and First Bancshares
If you would invest 2,275 in First Bancshares on October 26, 2024 and sell it today you would earn a total of 0.00 from holding First Bancshares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBOA Financial vs. First Bancshares
Performance |
| Timeline |
| CBOA Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CBOA Financial and First Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBOA Financial and First Bancshares
The main advantage of trading using opposite CBOA Financial and First Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBOA Financial position performs unexpectedly, First Bancshares 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 Bancshares will offset losses from the drop in First Bancshares' long position.| CBOA Financial vs. Pioneer Bankcorp | CBOA Financial vs. Liberty Northwest Bancorp | CBOA Financial vs. First Community | CBOA Financial vs. Coeur dAlene Bancorp |
| First Bancshares vs. Lewis Clark Bancorp | First Bancshares vs. Bank of Idaho | First Bancshares vs. Community Heritage Financial | First Bancshares vs. National Capital Bank |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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