Correlation Between First Farmers and Alpine Banks
Can any of the company-specific risk be diversified away by investing in both First Farmers and Alpine Banks 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 Farmers and Alpine Banks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Farmers Financial and Alpine Banks of, you can compare the effects of market volatilities on First Farmers and Alpine Banks 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 Farmers with a short position of Alpine Banks. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Farmers and Alpine Banks.
Diversification Opportunities for First Farmers and Alpine Banks
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Alpine is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding First Farmers Financial and Alpine Banks of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Banks and First Farmers 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 Farmers Financial are associated (or correlated) with Alpine Banks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Banks has no effect on the direction of First Farmers i.e., First Farmers and Alpine Banks go up and down completely randomly.
Pair Corralation between First Farmers and Alpine Banks
Given the investment horizon of 90 days First Farmers is expected to generate 1.95 times less return on investment than Alpine Banks. In addition to that, First Farmers is 1.88 times more volatile than Alpine Banks of. It trades about 0.02 of its total potential returns per unit of risk. Alpine Banks of is currently generating about 0.08 per unit of volatility. If you would invest 2,631 in Alpine Banks of on September 2, 2024 and sell it today you would earn a total of 669.00 from holding Alpine Banks of or generate 25.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.0% |
| Values | Daily Returns |
First Farmers Financial vs. Alpine Banks of
Performance |
| Timeline |
| First Farmers Financial |
| Alpine Banks |
First Farmers and Alpine Banks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Farmers and Alpine Banks
The main advantage of trading using opposite First Farmers and Alpine Banks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Farmers position performs unexpectedly, Alpine Banks 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 Alpine Banks will offset losses from the drop in Alpine Banks' long position.| First Farmers vs. Farmers Bancorp | First Farmers vs. Farmers Merchants Bancorp | First Farmers vs. Lakeland Financial | First Farmers vs. FFW Corporation |
| Alpine Banks vs. Piraeus Bank SA | Alpine Banks vs. Turkiye Garanti Bankasi | Alpine Banks vs. Uwharrie Capital Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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