Correlation Between CIB Marine and First Hawaiian
Can any of the company-specific risk be diversified away by investing in both CIB Marine and First Hawaiian 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 CIB Marine and First Hawaiian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIB Marine Bancshares and First Hawaiian, you can compare the effects of market volatilities on CIB Marine and First Hawaiian 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 CIB Marine with a short position of First Hawaiian. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIB Marine and First Hawaiian.
Diversification Opportunities for CIB Marine and First Hawaiian
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CIB and First is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CIB Marine Bancshares and First Hawaiian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hawaiian and CIB Marine 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 CIB Marine Bancshares are associated (or correlated) with First Hawaiian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hawaiian has no effect on the direction of CIB Marine i.e., CIB Marine and First Hawaiian go up and down completely randomly.
Pair Corralation between CIB Marine and First Hawaiian
Given the investment horizon of 90 days CIB Marine Bancshares is expected to generate 1.38 times more return on investment than First Hawaiian. However, CIB Marine is 1.38 times more volatile than First Hawaiian. It trades about 0.12 of its potential returns per unit of risk. First Hawaiian is currently generating about 0.1 per unit of risk. If you would invest 1,898 in CIB Marine Bancshares on September 3, 2024 and sell it today you would earn a total of 998.00 from holding CIB Marine Bancshares or generate 52.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIB Marine Bancshares vs. First Hawaiian
Performance |
| Timeline |
| CIB Marine Bancshares |
| First Hawaiian |
CIB Marine and First Hawaiian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIB Marine and First Hawaiian
The main advantage of trading using opposite CIB Marine and First Hawaiian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIB Marine position performs unexpectedly, First Hawaiian 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 Hawaiian will offset losses from the drop in First Hawaiian's long position.| CIB Marine vs. First Hawaiian | CIB Marine vs. Central Pacific Financial | CIB Marine vs. Territorial Bancorp | CIB Marine vs. Comerica |
| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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