Correlation Between First Ottawa and Blackhawk Bancorp
Can any of the company-specific risk be diversified away by investing in both First Ottawa and Blackhawk 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 Blackhawk 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 Blackhawk Bancorp, you can compare the effects of market volatilities on First Ottawa and Blackhawk 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 Blackhawk Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ottawa and Blackhawk Bancorp.
Diversification Opportunities for First Ottawa and Blackhawk Bancorp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Blackhawk is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding First Ottawa Bancshares and Blackhawk Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackhawk 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 Blackhawk Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackhawk Bancorp has no effect on the direction of First Ottawa i.e., First Ottawa and Blackhawk Bancorp go up and down completely randomly.
Pair Corralation between First Ottawa and Blackhawk Bancorp
Given the investment horizon of 90 days First Ottawa is expected to generate 4.21 times less return on investment than Blackhawk Bancorp. But when comparing it to its historical volatility, First Ottawa Bancshares is 1.04 times less risky than Blackhawk Bancorp. It trades about 0.09 of its potential returns per unit of risk. Blackhawk Bancorp is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,885 in Blackhawk Bancorp on August 31, 2024 and sell it today you would earn a total of 465.00 from holding Blackhawk Bancorp or generate 16.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 14.04% |
| Values | Daily Returns |
First Ottawa Bancshares vs. Blackhawk Bancorp
Performance |
| Timeline |
| First Ottawa Bancshares |
| Blackhawk Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Ottawa and Blackhawk Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ottawa and Blackhawk Bancorp
The main advantage of trading using opposite First Ottawa and Blackhawk Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ottawa position performs unexpectedly, Blackhawk 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 Blackhawk Bancorp will offset losses from the drop in Blackhawk Bancorp's long position.| First Ottawa vs. HUMANA INC | First Ottawa vs. SCOR PK | First Ottawa vs. Aquagold International | First Ottawa vs. Thrivent High Yield |
| Blackhawk Bancorp vs. CCSB Financial Corp | Blackhawk Bancorp vs. Bank of Utica | Blackhawk Bancorp vs. First Community Financial | Blackhawk Bancorp vs. BEO Bancorp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |