Correlation Between First Guaranty and CNB Financial
Can any of the company-specific risk be diversified away by investing in both First Guaranty and CNB Financial 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 CNB Financial 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 CNB Financial, you can compare the effects of market volatilities on First Guaranty and CNB Financial 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 CNB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Guaranty and CNB Financial.
Diversification Opportunities for First Guaranty and CNB Financial
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and CNB is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding First Guaranty Bancshares and CNB Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNB Financial 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 CNB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNB Financial has no effect on the direction of First Guaranty i.e., First Guaranty and CNB Financial go up and down completely randomly.
Pair Corralation between First Guaranty and CNB Financial
Assuming the 90 days horizon First Guaranty Bancshares is expected to under-perform the CNB Financial. In addition to that, First Guaranty is 1.2 times more volatile than CNB Financial. It trades about -0.22 of its total potential returns per unit of risk. CNB Financial is currently generating about 0.01 per unit of volatility. If you would invest 2,490 in CNB Financial on October 20, 2024 and sell it today you would earn a total of 8.00 from holding CNB Financial or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Guaranty Bancshares vs. CNB Financial
Performance |
| Timeline |
| First Guaranty Bancshares |
| CNB Financial |
First Guaranty and CNB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Guaranty and CNB Financial
The main advantage of trading using opposite First Guaranty and CNB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Guaranty position performs unexpectedly, CNB Financial 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 CNB Financial will offset losses from the drop in CNB Financial'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 |
| CNB Financial vs. Heartland Financial USA | CNB Financial vs. Dime Community Bancshares | CNB Financial vs. Pinnacle Financial Partners | CNB Financial vs. Fulton Financial |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |