Correlation Between First Guaranty and Contango ORE
Can any of the company-specific risk be diversified away by investing in both First Guaranty and Contango ORE 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 Contango ORE 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 Contango ORE, you can compare the effects of market volatilities on First Guaranty and Contango ORE 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 Contango ORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Guaranty and Contango ORE.
Diversification Opportunities for First Guaranty and Contango ORE
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Contango is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding First Guaranty Bancshares and Contango ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contango ORE 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 Contango ORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contango ORE has no effect on the direction of First Guaranty i.e., First Guaranty and Contango ORE go up and down completely randomly.
Pair Corralation between First Guaranty and Contango ORE
Given the investment horizon of 90 days First Guaranty Bancshares is expected to generate 0.79 times more return on investment than Contango ORE. However, First Guaranty Bancshares is 1.27 times less risky than Contango ORE. It trades about 0.54 of its potential returns per unit of risk. Contango ORE is currently generating about -0.3 per unit of risk. If you would invest 1,028 in First Guaranty Bancshares on August 25, 2024 and sell it today you would earn a total of 271.00 from holding First Guaranty Bancshares or generate 26.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
First Guaranty Bancshares vs. Contango ORE
Performance |
| Timeline |
| First Guaranty Bancshares |
| Contango ORE |
First Guaranty and Contango ORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Guaranty and Contango ORE
The main advantage of trading using opposite First Guaranty and Contango ORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Guaranty position performs unexpectedly, Contango ORE 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 Contango ORE will offset losses from the drop in Contango ORE's long position.| First Guaranty vs. Community West Bancshares | First Guaranty vs. First Northwest Bancorp | First Guaranty vs. First Financial Northwest | First Guaranty vs. Great Southern Bancorp |
| Contango ORE vs. Monarch Mining | Contango ORE vs. First Guaranty Bancshares | Contango ORE vs. Glen Burnie Bancorp | Contango ORE vs. Princeton Capital |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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