Correlation Between First Hawaiian and Touchmark Bancshares
Can any of the company-specific risk be diversified away by investing in both First Hawaiian and Touchmark Bancshares 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 Touchmark Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hawaiian and Touchmark Bancshares, you can compare the effects of market volatilities on First Hawaiian and Touchmark Bancshares 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 Touchmark Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hawaiian and Touchmark Bancshares.
Diversification Opportunities for First Hawaiian and Touchmark Bancshares
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Touchmark is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding First Hawaiian and Touchmark Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchmark Bancshares 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 Touchmark Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchmark Bancshares has no effect on the direction of First Hawaiian i.e., First Hawaiian and Touchmark Bancshares go up and down completely randomly.
Pair Corralation between First Hawaiian and Touchmark Bancshares
Considering the 90-day investment horizon First Hawaiian is expected to generate 1.49 times more return on investment than Touchmark Bancshares. However, First Hawaiian is 1.49 times more volatile than Touchmark Bancshares. It trades about 0.16 of its potential returns per unit of risk. Touchmark Bancshares is currently generating about -0.11 per unit of risk. If you would invest 2,244 in First Hawaiian on September 12, 2024 and sell it today you would earn a total of 503.00 from holding First Hawaiian or generate 22.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Hawaiian vs. Touchmark Bancshares
Performance |
| Timeline |
| First Hawaiian |
| Touchmark Bancshares |
First Hawaiian and Touchmark Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hawaiian and Touchmark Bancshares
The main advantage of trading using opposite First Hawaiian and Touchmark Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hawaiian position performs unexpectedly, Touchmark Bancshares 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 Touchmark Bancshares will offset losses from the drop in Touchmark Bancshares' long position.| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
| Touchmark Bancshares vs. Harbor Bankshares | Touchmark Bancshares vs. Liberty Northwest Bancorp | Touchmark Bancshares vs. Pioneer Bankcorp | Touchmark Bancshares vs. Summit Bancshares |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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