Correlation Between First Bankers and Blackhawk Bancorp
Can any of the company-specific risk be diversified away by investing in both First Bankers and Blackhawk Bancorp 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 Bankers and Blackhawk Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Bankers Trustshares and Blackhawk Bancorp, you can compare the effects of market volatilities on First Bankers and Blackhawk Bancorp 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 Bankers with a short position of Blackhawk Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bankers and Blackhawk Bancorp.
Diversification Opportunities for First Bankers and Blackhawk Bancorp
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Blackhawk is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding First Bankers Trustshares and Blackhawk Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackhawk Bancorp and First Bankers 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 Bankers Trustshares are associated (or correlated) with Blackhawk Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackhawk Bancorp has no effect on the direction of First Bankers i.e., First Bankers and Blackhawk Bancorp go up and down completely randomly.
Pair Corralation between First Bankers and Blackhawk Bancorp
If you would invest 1,452 in First Bankers Trustshares on September 1, 2024 and sell it today you would earn a total of 233.00 from holding First Bankers Trustshares or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.79% |
| Values | Daily Returns |
First Bankers Trustshares vs. Blackhawk Bancorp
Performance |
| Timeline |
| First Bankers Trustshares |
| Blackhawk Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Bankers and Blackhawk Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bankers and Blackhawk Bancorp
The main advantage of trading using opposite First Bankers and Blackhawk Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bankers position performs unexpectedly, Blackhawk Bancorp 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 Blackhawk Bancorp will offset losses from the drop in Blackhawk Bancorp's long position.| First Bankers vs. Greenville Federal Financial | First Bankers vs. First Ottawa Bancshares | First Bankers vs. Coastal Carolina Bancshares | First Bankers vs. Citizens Bancorp Investment |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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