Correlation Between First Bancshares and Lewis Clark
Can any of the company-specific risk be diversified away by investing in both First Bancshares and Lewis Clark 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 Lewis Clark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Bancshares and Lewis Clark Bancorp, you can compare the effects of market volatilities on First Bancshares and Lewis Clark 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 Lewis Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bancshares and Lewis Clark.
Diversification Opportunities for First Bancshares and Lewis Clark
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Lewis is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding First Bancshares and Lewis Clark Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lewis Clark 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 Lewis Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lewis Clark Bancorp has no effect on the direction of First Bancshares i.e., First Bancshares and Lewis Clark go up and down completely randomly.
Pair Corralation between First Bancshares and Lewis Clark
If you would invest 2,275 in First Bancshares on November 2, 2024 and sell it today you would earn a total of 0.00 from holding First Bancshares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
First Bancshares vs. Lewis Clark Bancorp
Performance |
| Timeline |
| First Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lewis Clark Bancorp |
First Bancshares and Lewis Clark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bancshares and Lewis Clark
The main advantage of trading using opposite First Bancshares and Lewis Clark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancshares position performs unexpectedly, Lewis Clark 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 Lewis Clark will offset losses from the drop in Lewis Clark'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 |
| Lewis Clark vs. Thor Industries | Lewis Clark vs. EastGroup Properties | Lewis Clark vs. Gentex | Lewis Clark vs. Tesla Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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