Correlation Between 1st Colonial and First Hawaiian
Can any of the company-specific risk be diversified away by investing in both 1st Colonial and First Hawaiian 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 1st Colonial and First Hawaiian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1st Colonial Bancorp and First Hawaiian, you can compare the effects of market volatilities on 1st Colonial and First Hawaiian 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 1st Colonial with a short position of First Hawaiian. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1st Colonial and First Hawaiian.
Diversification Opportunities for 1st Colonial and First Hawaiian
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 1st and First is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding 1st Colonial Bancorp and First Hawaiian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hawaiian and 1st Colonial 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 1st Colonial Bancorp are associated (or correlated) with First Hawaiian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hawaiian has no effect on the direction of 1st Colonial i.e., 1st Colonial and First Hawaiian go up and down completely randomly.
Pair Corralation between 1st Colonial and First Hawaiian
Given the investment horizon of 90 days 1st Colonial is expected to generate 7.64 times less return on investment than First Hawaiian. But when comparing it to its historical volatility, 1st Colonial Bancorp is 1.41 times less risky than First Hawaiian. It trades about 0.01 of its potential returns per unit of risk. First Hawaiian is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,727 in First Hawaiian on September 13, 2024 and sell it today you would earn a total of 20.00 from holding First Hawaiian or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1st Colonial Bancorp vs. First Hawaiian
Performance |
| Timeline |
| 1st Colonial Bancorp |
| First Hawaiian |
1st Colonial and First Hawaiian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1st Colonial and First Hawaiian
The main advantage of trading using opposite 1st Colonial and First Hawaiian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1st Colonial position performs unexpectedly, First Hawaiian 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 First Hawaiian will offset losses from the drop in First Hawaiian's long position.| 1st Colonial vs. CCSB Financial Corp | 1st Colonial vs. Bank of Utica | 1st Colonial vs. First Community Financial | 1st Colonial vs. BEO Bancorp |
| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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