Correlation Between First Ottawa and Apollo Bancorp
Can any of the company-specific risk be diversified away by investing in both First Ottawa and Apollo Bancorp 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 Ottawa and Apollo Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Ottawa Bancshares and Apollo Bancorp, you can compare the effects of market volatilities on First Ottawa and Apollo Bancorp 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 Ottawa with a short position of Apollo Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ottawa and Apollo Bancorp.
Diversification Opportunities for First Ottawa and Apollo Bancorp
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Apollo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding First Ottawa Bancshares and Apollo Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Bancorp and First Ottawa 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 Ottawa Bancshares are associated (or correlated) with Apollo Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Bancorp has no effect on the direction of First Ottawa i.e., First Ottawa and Apollo Bancorp go up and down completely randomly.
Pair Corralation between First Ottawa and Apollo Bancorp
Given the investment horizon of 90 days First Ottawa Bancshares is expected to generate 0.49 times more return on investment than Apollo Bancorp. However, First Ottawa Bancshares is 2.03 times less risky than Apollo Bancorp. It trades about 0.04 of its potential returns per unit of risk. Apollo Bancorp is currently generating about 0.02 per unit of risk. If you would invest 9,835 in First Ottawa Bancshares on August 26, 2024 and sell it today you would earn a total of 2,166 from holding First Ottawa Bancshares or generate 22.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.49% |
| Values | Daily Returns |
First Ottawa Bancshares vs. Apollo Bancorp
Performance |
| Timeline |
| First Ottawa Bancshares |
| Apollo Bancorp |
First Ottawa and Apollo Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ottawa and Apollo Bancorp
The main advantage of trading using opposite First Ottawa and Apollo Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ottawa position performs unexpectedly, Apollo Bancorp 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 Apollo Bancorp will offset losses from the drop in Apollo Bancorp's long position.| First Ottawa vs. Century Next Financial | First Ottawa vs. Citizens Financial Corp | First Ottawa vs. Triad Business Bank | First Ottawa vs. First Bankers Trustshares |
| Apollo Bancorp vs. The Farmers Bank | Apollo Bancorp vs. Bank of Utica | Apollo Bancorp vs. Delhi Bank Corp | Apollo Bancorp vs. CCSB Financial 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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