Correlation Between First Capital and International Bancshares
Can any of the company-specific risk be diversified away by investing in both First Capital and International Bancshares 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 Capital and International Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Capital and International Bancshares, you can compare the effects of market volatilities on First Capital and International Bancshares 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 Capital with a short position of International Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Capital and International Bancshares.
Diversification Opportunities for First Capital and International Bancshares
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and International is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding First Capital and International Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Bancshares and First Capital 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 Capital are associated (or correlated) with International Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Bancshares has no effect on the direction of First Capital i.e., First Capital and International Bancshares go up and down completely randomly.
Pair Corralation between First Capital and International Bancshares
Given the investment horizon of 90 days First Capital is expected to generate 3.39 times less return on investment than International Bancshares. In addition to that, First Capital is 1.19 times more volatile than International Bancshares. It trades about 0.02 of its total potential returns per unit of risk. International Bancshares is currently generating about 0.07 per unit of volatility. If you would invest 4,342 in International Bancshares on October 23, 2024 and sell it today you would earn a total of 2,256 from holding International Bancshares or generate 51.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.95% |
| Values | Daily Returns |
First Capital vs. International Bancshares
Performance |
| Timeline |
| First Capital |
| International Bancshares |
First Capital and International Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Capital and International Bancshares
The main advantage of trading using opposite First Capital and International Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Capital position performs unexpectedly, International Bancshares 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 International Bancshares will offset losses from the drop in International Bancshares' long position.| First Capital vs. Home Federal Bancorp | First Capital vs. First Financial Northwest | First Capital vs. First Northwest Bancorp | First Capital vs. Community West Bancshares |
| International Bancshares vs. Home Federal Bancorp | International Bancshares vs. First Financial Northwest | International Bancshares vs. First Northwest Bancorp | International Bancshares vs. First Capital |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |