Correlation Between First Bancorp and Security Bank
Can any of the company-specific risk be diversified away by investing in both First Bancorp and Security Bank 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 Bancorp and Security Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Bancorp and Security Bank, you can compare the effects of market volatilities on First Bancorp and Security Bank 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 Bancorp with a short position of Security Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bancorp and Security Bank.
Diversification Opportunities for First Bancorp and Security Bank
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Security is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding First Bancorp and Security Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank and First Bancorp 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 Bancorp are associated (or correlated) with Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank has no effect on the direction of First Bancorp i.e., First Bancorp and Security Bank go up and down completely randomly.
Pair Corralation between First Bancorp and Security Bank
If you would invest 151.00 in Security Bank on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Security Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
First Bancorp vs. Security Bank
Performance |
| Timeline |
| First Bancorp |
| Security Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Bancorp and Security Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bancorp and Security Bank
The main advantage of trading using opposite First Bancorp and Security Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancorp position performs unexpectedly, Security Bank 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 Security Bank will offset losses from the drop in Security Bank's long position.| First Bancorp vs. LINKBANCORP | First Bancorp vs. Bankwell Financial Group | First Bancorp vs. FS Bancorp | First Bancorp vs. Finward Bancorp |
| Security Bank vs. Merchants Marine Bancorp | Security Bank vs. First Bancorp | Security Bank vs. CNB Financial | Security Bank vs. MNB Holdings Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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