Correlation Between First Ottawa and Triad Business
Can any of the company-specific risk be diversified away by investing in both First Ottawa and Triad Business 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 Triad Business 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 Triad Business Bank, you can compare the effects of market volatilities on First Ottawa and Triad Business 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 Triad Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ottawa and Triad Business.
Diversification Opportunities for First Ottawa and Triad Business
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Triad is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding First Ottawa Bancshares and Triad Business Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triad Business Bank 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 Triad Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triad Business Bank has no effect on the direction of First Ottawa i.e., First Ottawa and Triad Business go up and down completely randomly.
Pair Corralation between First Ottawa and Triad Business
Given the investment horizon of 90 days First Ottawa Bancshares is expected to generate 0.52 times more return on investment than Triad Business. However, First Ottawa Bancshares is 1.93 times less risky than Triad Business. It trades about 0.2 of its potential returns per unit of risk. Triad Business Bank is currently generating about -0.13 per unit of risk. If you would invest 11,500 in First Ottawa Bancshares on August 29, 2024 and sell it today you would earn a total of 501.00 from holding First Ottawa Bancshares or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Ottawa Bancshares vs. Triad Business Bank
Performance |
| Timeline |
| First Ottawa Bancshares |
| Triad Business Bank |
First Ottawa and Triad Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ottawa and Triad Business
The main advantage of trading using opposite First Ottawa and Triad Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ottawa position performs unexpectedly, Triad Business 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 Triad Business will offset losses from the drop in Triad Business' 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 |
| Triad Business vs. Israel Discount Bank | Triad Business vs. Baraboo Bancorporation | Triad Business vs. Danske Bank AS | Triad Business vs. Jyske Bank AS |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |