Correlation Between First Business and Civista Bancshares
Can any of the company-specific risk be diversified away by investing in both First Business and Civista Bancshares 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 First Business and Civista Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Business Financial and Civista Bancshares, you can compare the effects of market volatilities on First Business and Civista Bancshares 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 First Business with a short position of Civista Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Business and Civista Bancshares.
Diversification Opportunities for First Business and Civista Bancshares
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Civista is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding First Business Financial and Civista Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civista Bancshares and First Business 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 First Business Financial are associated (or correlated) with Civista Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civista Bancshares has no effect on the direction of First Business i.e., First Business and Civista Bancshares go up and down completely randomly.
Pair Corralation between First Business and Civista Bancshares
Given the investment horizon of 90 days First Business is expected to generate 1.56 times less return on investment than Civista Bancshares. In addition to that, First Business is 1.21 times more volatile than Civista Bancshares. It trades about 0.2 of its total potential returns per unit of risk. Civista Bancshares is currently generating about 0.38 per unit of volatility. If you would invest 1,835 in Civista Bancshares on August 28, 2024 and sell it today you would earn a total of 445.00 from holding Civista Bancshares or generate 24.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Business Financial vs. Civista Bancshares
Performance |
| Timeline |
| First Business Financial |
| Civista Bancshares |
First Business and Civista Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Business and Civista Bancshares
The main advantage of trading using opposite First Business and Civista Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Business position performs unexpectedly, Civista Bancshares 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 Civista Bancshares will offset losses from the drop in Civista Bancshares' long position.| First Business vs. Fifth Third Bancorp | First Business vs. Huntington Bancshares Incorporated | First Business vs. MT Bank |
| Civista Bancshares vs. Home Federal Bancorp | Civista Bancshares vs. First Financial Northwest | Civista Bancshares vs. First Northwest Bancorp | Civista Bancshares 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |