Correlation Between Equity Bancshares, and 1st Source
Can any of the company-specific risk be diversified away by investing in both Equity Bancshares, and 1st Source 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 Equity Bancshares, and 1st Source into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Bancshares, and 1st Source, you can compare the effects of market volatilities on Equity Bancshares, and 1st Source 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 Equity Bancshares, with a short position of 1st Source. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Bancshares, and 1st Source.
Diversification Opportunities for Equity Bancshares, and 1st Source
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Equity and 1st is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and 1st Source in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1st Source and Equity 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 Equity Bancshares, are associated (or correlated) with 1st Source. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1st Source has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and 1st Source go up and down completely randomly.
Pair Corralation between Equity Bancshares, and 1st Source
Given the investment horizon of 90 days Equity Bancshares, is expected to generate 0.89 times more return on investment than 1st Source. However, Equity Bancshares, is 1.12 times less risky than 1st Source. It trades about 0.23 of its potential returns per unit of risk. 1st Source is currently generating about 0.17 per unit of risk. If you would invest 4,249 in Equity Bancshares, on September 1, 2024 and sell it today you would earn a total of 550.00 from holding Equity Bancshares, or generate 12.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Bancshares, vs. 1st Source
Performance |
| Timeline |
| Equity Bancshares, |
| 1st Source |
Equity Bancshares, and 1st Source Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Bancshares, and 1st Source
The main advantage of trading using opposite Equity Bancshares, and 1st Source positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Bancshares, position performs unexpectedly, 1st Source 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 1st Source will offset losses from the drop in 1st Source's long position.| Equity Bancshares, vs. Brookline Bancorp | Equity Bancshares, vs. Kearny Financial Corp | Equity Bancshares, vs. Heritage Financial | Equity Bancshares, vs. FVCBankcorp |
| 1st Source vs. Penns Woods Bancorp | 1st Source vs. Great Southern Bancorp | 1st Source vs. Waterstone Financial | 1st Source vs. Chemung Financial Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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