Correlation Between First Mid and Bancolombia
Can any of the company-specific risk be diversified away by investing in both First Mid and Bancolombia 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 Mid and Bancolombia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Mid Illinois and Bancolombia SA ADR, you can compare the effects of market volatilities on First Mid and Bancolombia 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 Mid with a short position of Bancolombia. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Mid and Bancolombia.
Diversification Opportunities for First Mid and Bancolombia
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Bancolombia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding First Mid Illinois and Bancolombia SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancolombia SA ADR and First Mid 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 Mid Illinois are associated (or correlated) with Bancolombia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancolombia SA ADR has no effect on the direction of First Mid i.e., First Mid and Bancolombia go up and down completely randomly.
Pair Corralation between First Mid and Bancolombia
Given the investment horizon of 90 days First Mid Illinois is expected to generate 2.06 times more return on investment than Bancolombia. However, First Mid is 2.06 times more volatile than Bancolombia SA ADR. It trades about 0.16 of its potential returns per unit of risk. Bancolombia SA ADR is currently generating about 0.16 per unit of risk. If you would invest 3,853 in First Mid Illinois on August 28, 2024 and sell it today you would earn a total of 419.00 from holding First Mid Illinois or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Mid Illinois vs. Bancolombia SA ADR
Performance |
| Timeline |
| First Mid Illinois |
| Bancolombia SA ADR |
First Mid and Bancolombia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Mid and Bancolombia
The main advantage of trading using opposite First Mid and Bancolombia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Mid position performs unexpectedly, Bancolombia 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 Bancolombia will offset losses from the drop in Bancolombia's long position.| First Mid vs. Finward Bancorp | First Mid vs. Great Southern Bancorp | First Mid vs. Franklin Financial Services | First Mid vs. Community West Bancshares |
| Bancolombia vs. Banco De Chile | Bancolombia vs. Banco Bradesco SA | Bancolombia vs. Banco Santander Chile | Bancolombia vs. Intercorp Financial Services |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |