Correlation Between First Capital and First Western
Can any of the company-specific risk be diversified away by investing in both First Capital and First Western 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 First Western into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Capital and First Western Financial, you can compare the effects of market volatilities on First Capital and First Western 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 First Western. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Capital and First Western.
Diversification Opportunities for First Capital and First Western
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and First is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding First Capital and First Western Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Western Financial 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 First Western. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Western Financial has no effect on the direction of First Capital i.e., First Capital and First Western go up and down completely randomly.
Pair Corralation between First Capital and First Western
Given the investment horizon of 90 days First Capital is expected to generate 0.77 times more return on investment than First Western. However, First Capital is 1.3 times less risky than First Western. It trades about 0.04 of its potential returns per unit of risk. First Western Financial is currently generating about -0.01 per unit of risk. If you would invest 2,287 in First Capital on August 30, 2024 and sell it today you would earn a total of 820.00 from holding First Capital or generate 35.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
First Capital vs. First Western Financial
Performance |
| Timeline |
| First Capital |
| First Western Financial |
First Capital and First Western Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Capital and First Western
The main advantage of trading using opposite First Capital and First Western positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Capital position performs unexpectedly, First Western 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 First Western will offset losses from the drop in First Western's 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 |
| First Western vs. Home Federal Bancorp | First Western vs. First Financial Northwest | First Western vs. First Northwest Bancorp | First Western 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |