Correlation Between First Bancshares, and ConnectOne Bancorp
Can any of the company-specific risk be diversified away by investing in both First Bancshares, and ConnectOne 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 First Bancshares, and ConnectOne Bancorp 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 ConnectOne Bancorp, you can compare the effects of market volatilities on First Bancshares, and ConnectOne 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 First Bancshares, with a short position of ConnectOne Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bancshares, and ConnectOne Bancorp.
Diversification Opportunities for First Bancshares, and ConnectOne Bancorp
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and ConnectOne is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding The First Bancshares, and ConnectOne Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConnectOne Bancorp 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 ConnectOne Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConnectOne Bancorp has no effect on the direction of First Bancshares, i.e., First Bancshares, and ConnectOne Bancorp go up and down completely randomly.
Pair Corralation between First Bancshares, and ConnectOne Bancorp
Given the investment horizon of 90 days The First Bancshares, is expected to under-perform the ConnectOne Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, The First Bancshares, is 1.2 times less risky than ConnectOne Bancorp. The stock trades about -0.25 of its potential returns per unit of risk. The ConnectOne Bancorp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,490 in ConnectOne Bancorp on December 1, 2024 and sell it today you would earn a total of 63.00 from holding ConnectOne Bancorp or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The First Bancshares, vs. ConnectOne Bancorp
Performance |
| Timeline |
| First Bancshares, |
| ConnectOne Bancorp |
First Bancshares, and ConnectOne Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bancshares, and ConnectOne Bancorp
The main advantage of trading using opposite First Bancshares, and ConnectOne Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancshares, position performs unexpectedly, ConnectOne 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 ConnectOne Bancorp will offset losses from the drop in ConnectOne Bancorp's long position.| First Bancshares, vs. First Northwest Bancorp | First Bancshares, vs. Community West Bancshares | First Bancshares, vs. First Financial Northwest | First Bancshares, vs. Great Southern Bancorp |
| ConnectOne Bancorp vs. Rhinebeck Bancorp | ConnectOne Bancorp vs. Home Bancorp | ConnectOne Bancorp vs. Parke Bancorp | ConnectOne Bancorp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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