Correlation Between First Community and Bank of Marin
Can any of the company-specific risk be diversified away by investing in both First Community and Bank of Marin 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 Community and Bank of Marin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Community and Bank of Marin, you can compare the effects of market volatilities on First Community and Bank of Marin 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 Community with a short position of Bank of Marin. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and Bank of Marin.
Diversification Opportunities for First Community and Bank of Marin
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Bank is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding First Community and Bank of Marin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Marin and First Community 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 Community are associated (or correlated) with Bank of Marin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Marin has no effect on the direction of First Community i.e., First Community and Bank of Marin go up and down completely randomly.
Pair Corralation between First Community and Bank of Marin
Given the investment horizon of 90 days First Community is expected to generate 1.54 times less return on investment than Bank of Marin. But when comparing it to its historical volatility, First Community is 2.24 times less risky than Bank of Marin. It trades about 0.31 of its potential returns per unit of risk. Bank of Marin is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,251 in Bank of Marin on August 28, 2024 and sell it today you would earn a total of 382.00 from holding Bank of Marin or generate 16.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Community vs. Bank of Marin
Performance |
| Timeline |
| First Community |
| Bank of Marin |
First Community and Bank of Marin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Community and Bank of Marin
The main advantage of trading using opposite First Community and Bank of Marin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community position performs unexpectedly, Bank of Marin 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 Bank of Marin will offset losses from the drop in Bank of Marin's long position.| First Community vs. Community West Bancshares | First Community vs. First Financial Northwest | First Community vs. First Northwest Bancorp | First Community vs. Home Federal Bancorp |
| Bank of Marin vs. Fifth Third Bancorp | Bank of Marin vs. Zions Bancorporation | Bank of Marin vs. Huntington Bancshares Incorporated | Bank of Marin vs. Comerica |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |