Correlation Between First Guaranty and Associated Banc
Can any of the company-specific risk be diversified away by investing in both First Guaranty and Associated Banc 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 Associated Banc 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 Associated Banc Corp, you can compare the effects of market volatilities on First Guaranty and Associated Banc 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 Associated Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Guaranty and Associated Banc.
Diversification Opportunities for First Guaranty and Associated Banc
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Associated is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding First Guaranty Bancshares and Associated Banc Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Banc Corp 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 Associated Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Banc Corp has no effect on the direction of First Guaranty i.e., First Guaranty and Associated Banc go up and down completely randomly.
Pair Corralation between First Guaranty and Associated Banc
Assuming the 90 days horizon First Guaranty Bancshares is expected to generate 1.97 times more return on investment than Associated Banc. However, First Guaranty is 1.97 times more volatile than Associated Banc Corp. It trades about 0.07 of its potential returns per unit of risk. Associated Banc Corp is currently generating about -0.05 per unit of risk. If you would invest 1,960 in First Guaranty Bancshares on November 18, 2024 and sell it today you would earn a total of 51.00 from holding First Guaranty Bancshares or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Guaranty Bancshares vs. Associated Banc Corp
Performance |
| Timeline |
| First Guaranty Bancshares |
| Associated Banc Corp |
First Guaranty and Associated Banc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Guaranty and Associated Banc
The main advantage of trading using opposite First Guaranty and Associated Banc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Guaranty position performs unexpectedly, Associated Banc 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 Associated Banc will offset losses from the drop in Associated Banc's long position.| First Guaranty vs. CNB Financial | First Guaranty vs. First Citizens BancShares | First Guaranty vs. Texas Capital Bancshares | First Guaranty vs. Merchants Bancorp |
| Associated Banc vs. Andover Bancorp | Associated Banc vs. Aozora Bank Ltd | Associated Banc vs. Absa Group Limited |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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