Correlation Between First Bancshares and Liberty Northwest
Can any of the company-specific risk be diversified away by investing in both First Bancshares and Liberty Northwest 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 Liberty Northwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Bancshares and Liberty Northwest Bancorp, you can compare the effects of market volatilities on First Bancshares and Liberty Northwest 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 Liberty Northwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bancshares and Liberty Northwest.
Diversification Opportunities for First Bancshares and Liberty Northwest
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Liberty is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding First Bancshares and Liberty Northwest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Northwest 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 First Bancshares are associated (or correlated) with Liberty Northwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Northwest Bancorp has no effect on the direction of First Bancshares i.e., First Bancshares and Liberty Northwest go up and down completely randomly.
Pair Corralation between First Bancshares and Liberty Northwest
If you would invest 495.00 in Liberty Northwest Bancorp on October 26, 2024 and sell it today you would earn a total of 25.00 from holding Liberty Northwest Bancorp or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
First Bancshares vs. Liberty Northwest Bancorp
Performance |
| Timeline |
| First Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Liberty Northwest Bancorp |
First Bancshares and Liberty Northwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bancshares and Liberty Northwest
The main advantage of trading using opposite First Bancshares and Liberty Northwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancshares position performs unexpectedly, Liberty Northwest 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 Liberty Northwest will offset losses from the drop in Liberty Northwest's long position.| First Bancshares vs. Lewis Clark Bancorp | First Bancshares vs. Bank of Idaho | First Bancshares vs. Community Heritage Financial | First Bancshares vs. National Capital Bank |
| Liberty Northwest vs. Uranium Energy Corp | Liberty Northwest vs. MGIC Investment Corp | Liberty Northwest vs. Griffon | Liberty Northwest vs. SEI Investments |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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