Correlation Between CrossFirst Bankshares and First Western
Can any of the company-specific risk be diversified away by investing in both CrossFirst Bankshares and First Western 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 CrossFirst Bankshares and First Western into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CrossFirst Bankshares and First Western Financial, you can compare the effects of market volatilities on CrossFirst Bankshares and First Western 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 CrossFirst Bankshares with a short position of First Western. Check out your portfolio center. Please also check ongoing floating volatility patterns of CrossFirst Bankshares and First Western.
Diversification Opportunities for CrossFirst Bankshares and First Western
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between CrossFirst and First is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CrossFirst Bankshares and First Western Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Western Financial and CrossFirst Bankshares 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 CrossFirst Bankshares are associated (or correlated) with First Western. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Western Financial has no effect on the direction of CrossFirst Bankshares i.e., CrossFirst Bankshares and First Western go up and down completely randomly.
Pair Corralation between CrossFirst Bankshares and First Western
Considering the 90-day investment horizon CrossFirst Bankshares is expected to generate 1.25 times less return on investment than First Western. But when comparing it to its historical volatility, CrossFirst Bankshares is 1.15 times less risky than First Western. It trades about 0.09 of its potential returns per unit of risk. First Western Financial is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,415 in First Western Financial on August 27, 2024 and sell it today you would earn a total of 722.00 from holding First Western Financial or generate 51.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CrossFirst Bankshares vs. First Western Financial
Performance |
| Timeline |
| CrossFirst Bankshares |
| First Western Financial |
CrossFirst Bankshares and First Western Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CrossFirst Bankshares and First Western
The main advantage of trading using opposite CrossFirst Bankshares and First Western positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CrossFirst Bankshares position performs unexpectedly, First Western 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 Western will offset losses from the drop in First Western's long position.| CrossFirst Bankshares vs. Fifth Third Bancorp | CrossFirst Bankshares vs. Zions Bancorporation | CrossFirst Bankshares vs. Huntington Bancshares Incorporated | CrossFirst Bankshares vs. PNC Financial Services |
| First Western vs. Home Federal Bancorp | First Western vs. First Financial Northwest | First Western vs. First Northwest Bancorp | First Western vs. First Capital |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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