Correlation Between First Hawaiian and Chiba Bank
Can any of the company-specific risk be diversified away by investing in both First Hawaiian and Chiba Bank 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 Hawaiian and Chiba Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hawaiian and Chiba Bank Ltd, you can compare the effects of market volatilities on First Hawaiian and Chiba Bank 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 Hawaiian with a short position of Chiba Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hawaiian and Chiba Bank.
Diversification Opportunities for First Hawaiian and Chiba Bank
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Chiba is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding First Hawaiian and Chiba Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiba Bank and First Hawaiian 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 Hawaiian are associated (or correlated) with Chiba Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiba Bank has no effect on the direction of First Hawaiian i.e., First Hawaiian and Chiba Bank go up and down completely randomly.
Pair Corralation between First Hawaiian and Chiba Bank
Considering the 90-day investment horizon First Hawaiian is expected to generate 0.94 times more return on investment than Chiba Bank. However, First Hawaiian is 1.07 times less risky than Chiba Bank. It trades about 0.03 of its potential returns per unit of risk. Chiba Bank Ltd is currently generating about 0.01 per unit of risk. If you would invest 1,768 in First Hawaiian on January 10, 2025 and sell it today you would earn a total of 346.00 from holding First Hawaiian or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 61.65% |
| Values | Daily Returns |
First Hawaiian vs. Chiba Bank Ltd
Performance |
| Timeline |
| First Hawaiian |
| Chiba Bank |
First Hawaiian and Chiba Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hawaiian and Chiba Bank
The main advantage of trading using opposite First Hawaiian and Chiba Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hawaiian position performs unexpectedly, Chiba Bank 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 Chiba Bank will offset losses from the drop in Chiba Bank's long position.| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
| Chiba Bank vs. First Hawaiian | Chiba Bank vs. Central Pacific Financial | Chiba Bank vs. Territorial Bancorp | Chiba Bank vs. Comerica |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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