Correlation Between First Guaranty and Customers Bancorp
Can any of the company-specific risk be diversified away by investing in both First Guaranty and Customers Bancorp 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 Customers Bancorp 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 Customers Bancorp, you can compare the effects of market volatilities on First Guaranty and Customers Bancorp 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 Customers Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Guaranty and Customers Bancorp.
Diversification Opportunities for First Guaranty and Customers Bancorp
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Customers is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding First Guaranty Bancshares and Customers Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Customers Bancorp 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 Customers Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Customers Bancorp has no effect on the direction of First Guaranty i.e., First Guaranty and Customers Bancorp go up and down completely randomly.
Pair Corralation between First Guaranty and Customers Bancorp
Assuming the 90 days horizon First Guaranty is expected to generate 1.35 times less return on investment than Customers Bancorp. In addition to that, First Guaranty is 1.51 times more volatile than Customers Bancorp. It trades about 0.02 of its total potential returns per unit of risk. Customers Bancorp is currently generating about 0.03 per unit of volatility. If you would invest 2,102 in Customers Bancorp on August 31, 2024 and sell it today you would earn a total of 492.00 from holding Customers Bancorp or generate 23.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Guaranty Bancshares vs. Customers Bancorp
Performance |
| Timeline |
| First Guaranty Bancshares |
| Customers Bancorp |
First Guaranty and Customers Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Guaranty and Customers Bancorp
The main advantage of trading using opposite First Guaranty and Customers Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Guaranty position performs unexpectedly, Customers Bancorp 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 Customers Bancorp will offset losses from the drop in Customers Bancorp's long position.| First Guaranty vs. KeyCorp | First Guaranty vs. Regions Financial | First Guaranty vs. US Bancorp | First Guaranty vs. KeyCorp |
| Customers Bancorp vs. Tectonic Financial PR | Customers Bancorp vs. First Guaranty Bancshares | Customers Bancorp vs. First Merchants | Customers Bancorp vs. Metropolitan Bank Holding |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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