Correlation Between First Community and Civista Bancshares

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both First Community and Civista 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 Community and Civista Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Community and Civista Bancshares, you can compare the effects of market volatilities on First Community and Civista 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 Community with a short position of Civista Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and Civista Bancshares.

Diversification Opportunities for First Community and Civista Bancshares

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between First and Civista is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding First Community and Civista Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civista Bancshares 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 Civista Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civista Bancshares has no effect on the direction of First Community i.e., First Community and Civista Bancshares go up and down completely randomly.

Pair Corralation between First Community and Civista Bancshares

Given the investment horizon of 90 days First Community is expected to generate 1.01 times less return on investment than Civista Bancshares. In addition to that, First Community is 1.06 times more volatile than Civista Bancshares. It trades about 0.11 of its total potential returns per unit of risk. Civista Bancshares is currently generating about 0.12 per unit of volatility. If you would invest  1,458  in Civista Bancshares on August 27, 2024 and sell it today you would earn a total of  832.00  from holding Civista Bancshares or generate 57.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

First Community  vs.  Civista Bancshares

 Performance 
       Timeline  
First Community 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in First Community are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, First Community displayed solid returns over the last few months and may actually be approaching a breakup point.
Civista Bancshares 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Civista Bancshares are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Civista Bancshares sustained solid returns over the last few months and may actually be approaching a breakup point.

First Community and Civista Bancshares Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with First Community and Civista Bancshares

The main advantage of trading using opposite First Community and Civista Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community position performs unexpectedly, Civista 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 Civista Bancshares will offset losses from the drop in Civista Bancshares' long position.
The idea behind First Community and Civista Bancshares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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

Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Transaction History
View history of all your transactions and understand their impact on performance
CEOs Directory
Screen CEOs from public companies around the world
FinTech Suite
Use AI to screen and filter profitable investment opportunities