Correlation Between First Bankers and CIB Marine
Can any of the company-specific risk be diversified away by investing in both First Bankers and CIB Marine 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 CIB Marine 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 CIB Marine Bancshares, you can compare the effects of market volatilities on First Bankers and CIB Marine 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 CIB Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bankers and CIB Marine.
Diversification Opportunities for First Bankers and CIB Marine
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between First and CIB is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding First Bankers Trustshares and CIB Marine Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIB Marine Bancshares 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 CIB Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIB Marine Bancshares has no effect on the direction of First Bankers i.e., First Bankers and CIB Marine go up and down completely randomly.
Pair Corralation between First Bankers and CIB Marine
Given the investment horizon of 90 days First Bankers is expected to generate 14.24 times less return on investment than CIB Marine. But when comparing it to its historical volatility, First Bankers Trustshares is 1.79 times less risky than CIB Marine. It trades about 0.02 of its potential returns per unit of risk. CIB Marine Bancshares is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,652 in CIB Marine Bancshares on October 20, 2024 and sell it today you would earn a total of 148.00 from holding CIB Marine Bancshares or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
First Bankers Trustshares vs. CIB Marine Bancshares
Performance |
| Timeline |
| First Bankers Trustshares |
| CIB Marine Bancshares |
First Bankers and CIB Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bankers and CIB Marine
The main advantage of trading using opposite First Bankers and CIB Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bankers position performs unexpectedly, CIB Marine 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 CIB Marine will offset losses from the drop in CIB Marine'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 |
| CIB Marine vs. U I Financial | CIB Marine vs. Heartland Banccorp | CIB Marine vs. United Bancorporation of | CIB Marine vs. Harbor Bankshares |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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