Correlation Between CoastalSouth Bancshares and First Bancorp
Can any of the company-specific risk be diversified away by investing in both CoastalSouth Bancshares and First Bancorp 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 CoastalSouth Bancshares and First Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CoastalSouth Bancshares and First Bancorp, you can compare the effects of market volatilities on CoastalSouth Bancshares and First Bancorp 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 CoastalSouth Bancshares with a short position of First Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoastalSouth Bancshares and First Bancorp.
Diversification Opportunities for CoastalSouth Bancshares and First Bancorp
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between CoastalSouth and First is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CoastalSouth Bancshares and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp and CoastalSouth Bancshares 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 CoastalSouth Bancshares are associated (or correlated) with First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of CoastalSouth Bancshares i.e., CoastalSouth Bancshares and First Bancorp go up and down completely randomly.
Pair Corralation between CoastalSouth Bancshares and First Bancorp
Given the investment horizon of 90 days CoastalSouth Bancshares is expected to generate 1.53 times less return on investment than First Bancorp. In addition to that, CoastalSouth Bancshares is 1.09 times more volatile than First Bancorp. It trades about 0.04 of its total potential returns per unit of risk. First Bancorp is currently generating about 0.06 per unit of volatility. If you would invest 1,298 in First Bancorp on August 30, 2024 and sell it today you would earn a total of 813.00 from holding First Bancorp or generate 62.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
CoastalSouth Bancshares vs. First Bancorp
Performance |
| Timeline |
| CoastalSouth Bancshares |
| First Bancorp |
CoastalSouth Bancshares and First Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CoastalSouth Bancshares and First Bancorp
The main advantage of trading using opposite CoastalSouth Bancshares and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoastalSouth Bancshares position performs unexpectedly, First Bancorp 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 Bancorp will offset losses from the drop in First Bancorp's long position.| CoastalSouth Bancshares vs. Bank of San | CoastalSouth Bancshares vs. Citizens Bancorp of | CoastalSouth Bancshares vs. Mountain Commerce Bancorp | CoastalSouth Bancshares vs. Washington Business Bank |
| First Bancorp vs. Franklin Financial Services | First Bancorp vs. National Bank Holdings | First Bancorp vs. Bankwell Financial Group | First Bancorp vs. Finward 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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