Correlation Between First Bancorp and SouthState
Can any of the company-specific risk be diversified away by investing in both First Bancorp and SouthState 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 SouthState into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Bancorp and SouthState, you can compare the effects of market volatilities on First Bancorp and SouthState 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 SouthState. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bancorp and SouthState.
Diversification Opportunities for First Bancorp and SouthState
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and SouthState is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding First Bancorp and SouthState in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SouthState 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 SouthState. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SouthState has no effect on the direction of First Bancorp i.e., First Bancorp and SouthState go up and down completely randomly.
Pair Corralation between First Bancorp and SouthState
Given the investment horizon of 90 days First Bancorp is expected to generate 0.94 times more return on investment than SouthState. However, First Bancorp is 1.07 times less risky than SouthState. It trades about 0.18 of its potential returns per unit of risk. SouthState is currently generating about 0.17 per unit of risk. If you would invest 4,249 in First Bancorp on August 31, 2024 and sell it today you would earn a total of 537.00 from holding First Bancorp or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Bancorp vs. SouthState
Performance |
| Timeline |
| First Bancorp |
| SouthState |
First Bancorp and SouthState Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bancorp and SouthState
The main advantage of trading using opposite First Bancorp and SouthState positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancorp position performs unexpectedly, SouthState 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 SouthState will offset losses from the drop in SouthState's long position.| First Bancorp vs. Home Bancorp | First Bancorp vs. First Business Financial | First Bancorp vs. LINKBANCORP | First Bancorp vs. Great Southern Bancorp |
| SouthState vs. Pinnacle Financial Partners | SouthState vs. Southern First Bancshares | SouthState vs. SmartFinancial, | SouthState vs. WSFS Financial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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