Correlation Between First Financial and American National
Can any of the company-specific risk be diversified away by investing in both First Financial and American National 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 Financial and American National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Financial Northwest and American National Bankshares, you can compare the effects of market volatilities on First Financial and American National 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 Financial with a short position of American National. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Financial and American National.
Diversification Opportunities for First Financial and American National
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between First and American is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding First Financial Northwest and American National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American National and First Financial 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 Financial Northwest are associated (or correlated) with American National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American National has no effect on the direction of First Financial i.e., First Financial and American National go up and down completely randomly.
Pair Corralation between First Financial and American National
If you would invest 3,160 in American National Bankshares on August 29, 2024 and sell it today you would earn a total of 0.00 from holding American National Bankshares or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
First Financial Northwest vs. American National Bankshares
Performance |
| Timeline |
| First Financial Northwest |
| American National |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Financial and American National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Financial and American National
The main advantage of trading using opposite First Financial and American National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Financial position performs unexpectedly, American National 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 American National will offset losses from the drop in American National's long position.| First Financial vs. Fifth Third Bancorp | First Financial vs. Huntington Bancshares Incorporated | First Financial vs. MT Bank |
| American National vs. First Northwest Bancorp | American National vs. Community West Bancshares | American National vs. First Financial Northwest | American National vs. Great Southern 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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