Correlation Between First Bancshares, and CrossFirst Bankshares
Can any of the company-specific risk be diversified away by investing in both First Bancshares, and CrossFirst Bankshares 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 Bancshares, and CrossFirst Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The First Bancshares, and CrossFirst Bankshares, you can compare the effects of market volatilities on First Bancshares, and CrossFirst Bankshares 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 Bancshares, with a short position of CrossFirst Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bancshares, and CrossFirst Bankshares.
Diversification Opportunities for First Bancshares, and CrossFirst Bankshares
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and CrossFirst is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding The First Bancshares, and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares and First 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 The First Bancshares, are associated (or correlated) with CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of First Bancshares, i.e., First Bancshares, and CrossFirst Bankshares go up and down completely randomly.
Pair Corralation between First Bancshares, and CrossFirst Bankshares
Given the investment horizon of 90 days The First Bancshares, is expected to generate 0.91 times more return on investment than CrossFirst Bankshares. However, The First Bancshares, is 1.1 times less risky than CrossFirst Bankshares. It trades about 0.19 of its potential returns per unit of risk. CrossFirst Bankshares is currently generating about 0.18 per unit of risk. If you would invest 3,299 in The First Bancshares, on August 25, 2024 and sell it today you would earn a total of 466.00 from holding The First Bancshares, or generate 14.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The First Bancshares, vs. CrossFirst Bankshares
Performance |
| Timeline |
| First Bancshares, |
| CrossFirst Bankshares |
First Bancshares, and CrossFirst Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bancshares, and CrossFirst Bankshares
The main advantage of trading using opposite First Bancshares, and CrossFirst Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancshares, position performs unexpectedly, CrossFirst Bankshares 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 CrossFirst Bankshares will offset losses from the drop in CrossFirst Bankshares' long position.| First Bancshares, vs. KeyCorp | First Bancshares, vs. Fifth Third Bancorp | First Bancshares, vs. Zions Bancorporation | First Bancshares, vs. Huntington Bancshares Incorporated |
| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares vs. Community West Bancshares |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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