Correlation Between First Community and Nmb Financial
Can any of the company-specific risk be diversified away by investing in both First Community and Nmb Financial 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 Community and Nmb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Community Financial and Nmb Financial Corp, you can compare the effects of market volatilities on First Community and Nmb Financial 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 Community with a short position of Nmb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and Nmb Financial.
Diversification Opportunities for First Community and Nmb Financial
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Nmb is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding First Community Financial and Nmb Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nmb Financial Corp and First Community 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 Community Financial are associated (or correlated) with Nmb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nmb Financial Corp has no effect on the direction of First Community i.e., First Community and Nmb Financial go up and down completely randomly.
Pair Corralation between First Community and Nmb Financial
Given the investment horizon of 90 days First Community Financial is expected to under-perform the Nmb Financial. In addition to that, First Community is 2.05 times more volatile than Nmb Financial Corp. It trades about -0.19 of its total potential returns per unit of risk. Nmb Financial Corp is currently generating about 0.3 per unit of volatility. If you would invest 1,165 in Nmb Financial Corp on August 30, 2024 and sell it today you would earn a total of 235.00 from holding Nmb Financial Corp or generate 20.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Community Financial vs. Nmb Financial Corp
Performance |
| Timeline |
| First Community Financial |
| Nmb Financial Corp |
First Community and Nmb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Community and Nmb Financial
The main advantage of trading using opposite First Community and Nmb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community position performs unexpectedly, Nmb Financial 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 Nmb Financial will offset losses from the drop in Nmb Financial's long position.| First Community vs. CCSB Financial Corp | First Community vs. Bank of Utica | First Community vs. BEO Bancorp | First Community vs. First Community |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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