Correlation Between First Capital and Origin Bancorp
Can any of the company-specific risk be diversified away by investing in both First Capital and Origin 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 Capital and Origin Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Capital and Origin Bancorp, you can compare the effects of market volatilities on First Capital and Origin 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 Capital with a short position of Origin Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Capital and Origin Bancorp.
Diversification Opportunities for First Capital and Origin Bancorp
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Origin is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding First Capital and Origin Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Bancorp 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 Origin Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Bancorp has no effect on the direction of First Capital i.e., First Capital and Origin Bancorp go up and down completely randomly.
Pair Corralation between First Capital and Origin Bancorp
Given the investment horizon of 90 days First Capital is expected to generate 1.05 times more return on investment than Origin Bancorp. However, First Capital is 1.05 times more volatile than Origin Bancorp. It trades about 0.04 of its potential returns per unit of risk. Origin Bancorp is currently generating about -0.11 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 Against |
| Strength | Very Weak |
| Accuracy | 23.0% |
| Values | Daily Returns |
First Capital vs. Origin Bancorp
Performance |
| Timeline |
| First Capital |
| Origin Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Capital and Origin Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Capital and Origin Bancorp
The main advantage of trading using opposite First Capital and Origin Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Capital position performs unexpectedly, Origin 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 Origin Bancorp will offset losses from the drop in Origin Bancorp'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 |
| Origin Bancorp vs. Home Federal Bancorp | Origin Bancorp vs. First Financial Northwest | Origin Bancorp vs. First Northwest Bancorp | Origin Bancorp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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