Correlation Between Evans Bancorp and First Guaranty
Can any of the company-specific risk be diversified away by investing in both Evans Bancorp and First Guaranty 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 Evans Bancorp and First Guaranty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evans Bancorp and First Guaranty Bancshares, you can compare the effects of market volatilities on Evans Bancorp and First Guaranty 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 Evans Bancorp with a short position of First Guaranty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evans Bancorp and First Guaranty.
Diversification Opportunities for Evans Bancorp and First Guaranty
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evans and First is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Evans Bancorp and First Guaranty Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Guaranty Bancshares and Evans Bancorp 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 Evans Bancorp are associated (or correlated) with First Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Guaranty Bancshares has no effect on the direction of Evans Bancorp i.e., Evans Bancorp and First Guaranty go up and down completely randomly.
Pair Corralation between Evans Bancorp and First Guaranty
Given the investment horizon of 90 days Evans Bancorp is expected to generate 2.51 times less return on investment than First Guaranty. In addition to that, Evans Bancorp is 1.21 times more volatile than First Guaranty Bancshares. It trades about 0.2 of its total potential returns per unit of risk. First Guaranty Bancshares is currently generating about 0.61 per unit of volatility. If you would invest 1,075 in First Guaranty Bancshares on September 1, 2024 and sell it today you would earn a total of 356.00 from holding First Guaranty Bancshares or generate 33.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evans Bancorp vs. First Guaranty Bancshares
Performance |
| Timeline |
| Evans Bancorp |
| First Guaranty Bancshares |
Evans Bancorp and First Guaranty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evans Bancorp and First Guaranty
The main advantage of trading using opposite Evans Bancorp and First Guaranty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evans Bancorp position performs unexpectedly, First Guaranty 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 Guaranty will offset losses from the drop in First Guaranty's long position.| Evans Bancorp vs. First Community | Evans Bancorp vs. Oak Valley Bancorp | Evans Bancorp vs. First Financial Northwest | Evans Bancorp vs. ESSA Bancorp |
| First Guaranty vs. Community West Bancshares | First Guaranty vs. First Northwest Bancorp | First Guaranty vs. First Financial Northwest | First Guaranty vs. Great Southern 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 Stocks Directory module to find actively traded stocks across global markets.
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