Correlation Between First Bancorp and FT Cboe
Can any of the company-specific risk be diversified away by investing in both First Bancorp and FT Cboe 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 Bancorp and FT Cboe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Bancorp and FT Cboe Vest, you can compare the effects of market volatilities on First Bancorp and FT Cboe 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 Bancorp with a short position of FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bancorp and FT Cboe.
Diversification Opportunities for First Bancorp and FT Cboe
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and FMAR is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding First Bancorp and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest and First 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 First Bancorp are associated (or correlated) with FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of First Bancorp i.e., First Bancorp and FT Cboe go up and down completely randomly.
Pair Corralation between First Bancorp and FT Cboe
Given the investment horizon of 90 days First Bancorp is expected to under-perform the FT Cboe. In addition to that, First Bancorp is 7.0 times more volatile than FT Cboe Vest. It trades about -0.21 of its total potential returns per unit of risk. FT Cboe Vest is currently generating about 0.0 per unit of volatility. If you would invest 4,393 in FT Cboe Vest on November 28, 2024 and sell it today you would earn a total of 0.00 from holding FT Cboe Vest or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Bancorp vs. FT Cboe Vest
Performance |
| Timeline |
| First Bancorp |
| FT Cboe Vest |
First Bancorp and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bancorp and FT Cboe
The main advantage of trading using opposite First Bancorp and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancorp position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe's long position.| First Bancorp vs. Home Bancorp | First Bancorp vs. First Business Financial | First Bancorp vs. LINKBANCORP | First Bancorp vs. Great Southern Bancorp |
| FT Cboe vs. First United | FT Cboe vs. First Bancorp | FT Cboe vs. Financial Institutions | FT Cboe vs. First 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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