Correlation Between First Community and Westbury Bancorp
Can any of the company-specific risk be diversified away by investing in both First Community and Westbury 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 Community and Westbury Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Community and Westbury Bancorp, you can compare the effects of market volatilities on First Community and Westbury 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 Community with a short position of Westbury Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and Westbury Bancorp.
Diversification Opportunities for First Community and Westbury Bancorp
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Westbury is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding First Community and Westbury Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westbury Bancorp 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 Westbury Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westbury Bancorp has no effect on the direction of First Community i.e., First Community and Westbury Bancorp go up and down completely randomly.
Pair Corralation between First Community and Westbury Bancorp
If you would invest 1,727 in First Community on August 25, 2024 and sell it today you would earn a total of 778.00 from holding First Community or generate 45.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
First Community vs. Westbury Bancorp
Performance |
| Timeline |
| First Community |
| Westbury Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Community and Westbury Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Community and Westbury Bancorp
The main advantage of trading using opposite First Community and Westbury Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community position performs unexpectedly, Westbury 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 Westbury Bancorp will offset losses from the drop in Westbury Bancorp'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 |
| Westbury Bancorp vs. Home Federal Bancorp | Westbury Bancorp vs. First Northwest Bancorp | Westbury Bancorp vs. First Community | Westbury Bancorp vs. Oak Valley Bancorp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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