Correlation Between First Guaranty and Auburn National
Can any of the company-specific risk be diversified away by investing in both First Guaranty and Auburn 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 Guaranty and Auburn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Guaranty Bancshares and Auburn National Bancorporation, you can compare the effects of market volatilities on First Guaranty and Auburn 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 Guaranty with a short position of Auburn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Guaranty and Auburn National.
Diversification Opportunities for First Guaranty and Auburn National
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Auburn is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding First Guaranty Bancshares and Auburn National Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auburn National Banc and First Guaranty 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 Guaranty Bancshares are associated (or correlated) with Auburn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auburn National Banc has no effect on the direction of First Guaranty i.e., First Guaranty and Auburn National go up and down completely randomly.
Pair Corralation between First Guaranty and Auburn National
Given the investment horizon of 90 days First Guaranty Bancshares is expected to generate 1.29 times more return on investment than Auburn National. However, First Guaranty is 1.29 times more volatile than Auburn National Bancorporation. It trades about 0.66 of its potential returns per unit of risk. Auburn National Bancorporation is currently generating about 0.18 per unit of risk. If you would invest 1,012 in First Guaranty Bancshares on August 28, 2024 and sell it today you would earn a total of 328.00 from holding First Guaranty Bancshares or generate 32.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Guaranty Bancshares vs. Auburn National Bancorp.
Performance |
| Timeline |
| First Guaranty Bancshares |
| Auburn National Banc |
First Guaranty and Auburn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Guaranty and Auburn National
The main advantage of trading using opposite First Guaranty and Auburn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Guaranty position performs unexpectedly, Auburn 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 Auburn National will offset losses from the drop in Auburn National's long position.| First Guaranty vs. Fifth Third Bancorp | First Guaranty vs. Zions Bancorporation | First Guaranty vs. Huntington Bancshares Incorporated | First Guaranty vs. Comerica |
| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |