Correlation Between First Community and Oakworth Capital
Can any of the company-specific risk be diversified away by investing in both First Community and Oakworth Capital 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 Oakworth Capital 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 Oakworth Capital, you can compare the effects of market volatilities on First Community and Oakworth Capital 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 Oakworth Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and Oakworth Capital.
Diversification Opportunities for First Community and Oakworth Capital
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Oakworth is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding First Community Financial and Oakworth Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakworth Capital 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 Oakworth Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakworth Capital has no effect on the direction of First Community i.e., First Community and Oakworth Capital go up and down completely randomly.
Pair Corralation between First Community and Oakworth Capital
Given the investment horizon of 90 days First Community Financial is expected to under-perform the Oakworth Capital. In addition to that, First Community is 8.51 times more volatile than Oakworth Capital. It trades about -0.15 of its total potential returns per unit of risk. Oakworth Capital is currently generating about 0.47 per unit of volatility. If you would invest 2,975 in Oakworth Capital on August 30, 2024 and sell it today you would earn a total of 105.00 from holding Oakworth Capital or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Community Financial vs. Oakworth Capital
Performance |
| Timeline |
| First Community Financial |
| Oakworth Capital |
First Community and Oakworth Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Community and Oakworth Capital
The main advantage of trading using opposite First Community and Oakworth Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community position performs unexpectedly, Oakworth Capital 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 Oakworth Capital will offset losses from the drop in Oakworth Capital'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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |