Correlation Between First Hawaiian and Exchange Bankshares
Can any of the company-specific risk be diversified away by investing in both First Hawaiian and Exchange Bankshares 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 Exchange Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hawaiian and Exchange Bankshares, you can compare the effects of market volatilities on First Hawaiian and Exchange Bankshares 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 Exchange Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hawaiian and Exchange Bankshares.
Diversification Opportunities for First Hawaiian and Exchange Bankshares
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Exchange is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding First Hawaiian and Exchange Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Bankshares 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 Exchange Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Bankshares has no effect on the direction of First Hawaiian i.e., First Hawaiian and Exchange Bankshares go up and down completely randomly.
Pair Corralation between First Hawaiian and Exchange Bankshares
If you would invest 2,591 in First Hawaiian on October 29, 2024 and sell it today you would earn a total of 45.00 from holding First Hawaiian or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Hawaiian vs. Exchange Bankshares
Performance |
| Timeline |
| First Hawaiian |
| Exchange Bankshares |
First Hawaiian and Exchange Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hawaiian and Exchange Bankshares
The main advantage of trading using opposite First Hawaiian and Exchange Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hawaiian position performs unexpectedly, Exchange Bankshares 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 Exchange Bankshares will offset losses from the drop in Exchange Bankshares' long position.| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
| Exchange Bankshares vs. First Hawaiian | Exchange Bankshares vs. Central Pacific Financial | Exchange Bankshares vs. Territorial Bancorp | Exchange Bankshares 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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