Correlation Between First Capital and Inter Co
Can any of the company-specific risk be diversified away by investing in both First Capital and Inter Co 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 Inter Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Capital and Inter Co Class, you can compare the effects of market volatilities on First Capital and Inter Co 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 Inter Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Capital and Inter Co.
Diversification Opportunities for First Capital and Inter Co
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Inter is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding First Capital and Inter Co Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Co Class 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 Inter Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Co Class has no effect on the direction of First Capital i.e., First Capital and Inter Co go up and down completely randomly.
Pair Corralation between First Capital and Inter Co
Given the investment horizon of 90 days First Capital is expected to generate 2.19 times less return on investment than Inter Co. But when comparing it to its historical volatility, First Capital is 1.44 times less risky than Inter Co. It trades about 0.03 of its potential returns per unit of risk. Inter Co Class is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 323.00 in Inter Co Class on September 2, 2024 and sell it today you would earn a total of 139.00 from holding Inter Co Class or generate 43.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.85% |
| Values | Daily Returns |
First Capital vs. Inter Co Class
Performance |
| Timeline |
| First Capital |
| Inter Co Class |
First Capital and Inter Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Capital and Inter Co
The main advantage of trading using opposite First Capital and Inter Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Capital position performs unexpectedly, Inter Co 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 Inter Co will offset losses from the drop in Inter Co's long position.| First Capital vs. Affinity Bancshares | First Capital vs. Southern California Bancorp | First Capital vs. Auburn National Bancorporation | First Capital vs. BayCom Corp |
| Inter Co vs. Community West Bancshares | Inter Co vs. First Financial Northwest | Inter Co vs. First Northwest Bancorp | Inter Co 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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