Correlation Between Freedom Bank and First Ottawa
Can any of the company-specific risk be diversified away by investing in both Freedom Bank and First Ottawa 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 Freedom Bank and First Ottawa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom Bank of and First Ottawa Bancshares, you can compare the effects of market volatilities on Freedom Bank and First Ottawa 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 Freedom Bank with a short position of First Ottawa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Bank and First Ottawa.
Diversification Opportunities for Freedom Bank and First Ottawa
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Freedom and First is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Bank of and First Ottawa Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ottawa Bancshares and Freedom Bank 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 Freedom Bank of are associated (or correlated) with First Ottawa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ottawa Bancshares has no effect on the direction of Freedom Bank i.e., Freedom Bank and First Ottawa go up and down completely randomly.
Pair Corralation between Freedom Bank and First Ottawa
Given the investment horizon of 90 days Freedom Bank of is expected to under-perform the First Ottawa. In addition to that, Freedom Bank is 1.31 times more volatile than First Ottawa Bancshares. It trades about -0.16 of its total potential returns per unit of risk. First Ottawa Bancshares is currently generating about 0.25 per unit of volatility. If you would invest 13,000 in First Ottawa Bancshares on October 22, 2024 and sell it today you would earn a total of 500.00 from holding First Ottawa Bancshares or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Bank of vs. First Ottawa Bancshares
Performance |
| Timeline |
| Freedom Bank |
| First Ottawa Bancshares |
Freedom Bank and First Ottawa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Bank and First Ottawa
The main advantage of trading using opposite Freedom Bank and First Ottawa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Bank position performs unexpectedly, First Ottawa 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 Ottawa will offset losses from the drop in First Ottawa's long position.| Freedom Bank vs. National Capital Bank | Freedom Bank vs. Community Heritage Financial | Freedom Bank vs. Citizens Financial Corp | Freedom Bank vs. Bank of Idaho |
| First Ottawa vs. Century Next Financial | First Ottawa vs. Citizens Financial Corp | First Ottawa vs. Triad Business Bank | First Ottawa vs. First Bankers Trustshares |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |