Correlation Between First Bancshares, and Cullman Bancorp
Can any of the company-specific risk be diversified away by investing in both First Bancshares, and Cullman 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 Cullman 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 Cullman Bancorp, you can compare the effects of market volatilities on First Bancshares, and Cullman 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 Cullman Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bancshares, and Cullman Bancorp.
Diversification Opportunities for First Bancshares, and Cullman Bancorp
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Cullman is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding The First Bancshares, and Cullman Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullman 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 Cullman Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullman Bancorp has no effect on the direction of First Bancshares, i.e., First Bancshares, and Cullman Bancorp go up and down completely randomly.
Pair Corralation between First Bancshares, and Cullman Bancorp
If you would invest 3,403 in The First Bancshares, on August 28, 2024 and sell it today you would earn a total of 419.00 from holding The First Bancshares, or generate 12.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
The First Bancshares, vs. Cullman Bancorp
Performance |
| Timeline |
| First Bancshares, |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Bancshares, and Cullman Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bancshares, and Cullman Bancorp
The main advantage of trading using opposite First Bancshares, and Cullman Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancshares, position performs unexpectedly, Cullman 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 Cullman Bancorp will offset losses from the drop in Cullman 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 |
| Cullman Bancorp vs. Home Federal Bancorp | Cullman Bancorp vs. Lake Shore Bancorp | Cullman Bancorp vs. Community West Bancshares | Cullman Bancorp vs. Magyar 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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