Correlation Between First Of and Bank of Marin
Can any of the company-specific risk be diversified away by investing in both First Of and Bank of Marin 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 Of and Bank of Marin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First of Long and Bank of Marin, you can compare the effects of market volatilities on First Of and Bank of Marin 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 Of with a short position of Bank of Marin. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Of and Bank of Marin.
Diversification Opportunities for First Of and Bank of Marin
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Bank is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding First of Long and Bank of Marin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Marin and First Of 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 of Long are associated (or correlated) with Bank of Marin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Marin has no effect on the direction of First Of i.e., First Of and Bank of Marin go up and down completely randomly.
Pair Corralation between First Of and Bank of Marin
Given the investment horizon of 90 days First of Long is expected to generate 1.09 times more return on investment than Bank of Marin. However, First Of is 1.09 times more volatile than Bank of Marin. It trades about 0.14 of its potential returns per unit of risk. Bank of Marin is currently generating about -0.02 per unit of risk. If you would invest 1,228 in First of Long on November 28, 2024 and sell it today you would earn a total of 68.00 from holding First of Long or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First of Long vs. Bank of Marin
Performance |
| Timeline |
| First of Long |
| Bank of Marin |
First Of and Bank of Marin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Of and Bank of Marin
The main advantage of trading using opposite First Of and Bank of Marin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Of position performs unexpectedly, Bank of Marin 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 Bank of Marin will offset losses from the drop in Bank of Marin's long position.| First Of vs. Great Southern Bancorp | First Of vs. Enterprise Bancorp | First Of vs. Home Bancorp | First Of vs. Community West Bancshares |
| Bank of Marin vs. Community West Bancshares | Bank of Marin vs. Heritage Financial | Bank of Marin vs. First Financial Northwest | Bank of Marin vs. Sierra Bancorp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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