Correlation Between First Bancorp and CONSUMERS
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By analyzing existing cross correlation between First Bancorp and CONSUMERS ENERGY 325, you can compare the effects of market volatilities on First Bancorp and CONSUMERS 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 CONSUMERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bancorp and CONSUMERS.
Diversification Opportunities for First Bancorp and CONSUMERS
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and CONSUMERS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding First Bancorp and CONSUMERS ENERGY 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSUMERS ENERGY 325 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 CONSUMERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSUMERS ENERGY 325 has no effect on the direction of First Bancorp i.e., First Bancorp and CONSUMERS go up and down completely randomly.
Pair Corralation between First Bancorp and CONSUMERS
Given the investment horizon of 90 days First Bancorp is expected to under-perform the CONSUMERS. In addition to that, First Bancorp is 2.24 times more volatile than CONSUMERS ENERGY 325. It trades about -0.2 of its total potential returns per unit of risk. CONSUMERS ENERGY 325 is currently generating about 0.07 per unit of volatility. If you would invest 7,222 in CONSUMERS ENERGY 325 on November 28, 2024 and sell it today you would earn a total of 25.00 from holding CONSUMERS ENERGY 325 or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 33.33% |
| Values | Daily Returns |
First Bancorp vs. CONSUMERS ENERGY 325
Performance |
| Timeline |
| First Bancorp |
| CONSUMERS ENERGY 325 |
First Bancorp and CONSUMERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bancorp and CONSUMERS
The main advantage of trading using opposite First Bancorp and CONSUMERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancorp position performs unexpectedly, CONSUMERS 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 CONSUMERS will offset losses from the drop in CONSUMERS's long position.| First Bancorp vs. Home Bancorp | First Bancorp vs. First Business Financial | First Bancorp vs. LINKBANCORP | First Bancorp vs. Great Southern Bancorp |
| CONSUMERS vs. Zhihu Inc ADR | CONSUMERS vs. KVH Industries | CONSUMERS vs. Ryanair Holdings PLC | CONSUMERS vs. Westinghouse Air Brake |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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