Correlation Between First Community and Juniata Valley
Can any of the company-specific risk be diversified away by investing in both First Community and Juniata Valley 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 Juniata Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Community and Juniata Valley Financial, you can compare the effects of market volatilities on First Community and Juniata Valley 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 Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and Juniata Valley.
Diversification Opportunities for First Community and Juniata Valley
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Juniata is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding First Community and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial 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 Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of First Community i.e., First Community and Juniata Valley go up and down completely randomly.
Pair Corralation between First Community and Juniata Valley
If you would invest 1,205 in Juniata Valley Financial on September 2, 2024 and sell it today you would earn a total of 145.00 from holding Juniata Valley Financial or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Community vs. Juniata Valley Financial
Performance |
| Timeline |
| First Community |
| Juniata Valley Financial |
First Community and Juniata Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Community and Juniata Valley
The main advantage of trading using opposite First Community and Juniata Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community position performs unexpectedly, Juniata Valley 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 Juniata Valley will offset losses from the drop in Juniata Valley's long position.| First Community vs. Piraeus Bank SA | First Community vs. Turkiye Garanti Bankasi | First Community vs. Uwharrie Capital Corp |
| Juniata Valley vs. FNB Inc | Juniata Valley vs. Apollo Bancorp | Juniata Valley vs. Commercial National Financial | Juniata Valley vs. Eastern Michigan Financial |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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