Correlation Between First Citizens and First Bancshares
Can any of the company-specific risk be diversified away by investing in both First Citizens and First Bancshares 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 Citizens and First Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The First Citizens and First Bancshares, you can compare the effects of market volatilities on First Citizens and First Bancshares 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 Citizens with a short position of First Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Citizens and First Bancshares.
Diversification Opportunities for First Citizens and First Bancshares
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The First Citizens and First Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancshares and First Citizens 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 The First Citizens are associated (or correlated) with First Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancshares has no effect on the direction of First Citizens i.e., First Citizens and First Bancshares go up and down completely randomly.
Pair Corralation between First Citizens and First Bancshares
Given the investment horizon of 90 days The First Citizens is expected to under-perform the First Bancshares. But the pink sheet apears to be less risky and, when comparing its historical volatility, The First Citizens is 1.74 times less risky than First Bancshares. The pink sheet trades about -0.02 of its potential returns per unit of risk. The First Bancshares is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,885 in First Bancshares on August 24, 2024 and sell it today you would earn a total of 390.00 from holding First Bancshares or generate 20.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 69.13% |
| Values | Daily Returns |
The First Citizens vs. First Bancshares
Performance |
| Timeline |
| First Citizens |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Citizens and First Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Citizens and First Bancshares
The main advantage of trading using opposite First Citizens and First Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Citizens position performs unexpectedly, First Bancshares 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 First Bancshares will offset losses from the drop in First Bancshares' long position.| First Citizens vs. Hooker Furniture | First Citizens vs. Mesa Air Group | First Citizens vs. Ryanair Holdings PLC | First Citizens vs. United Guardian |
| First Bancshares vs. Lewis Clark Bancorp | First Bancshares vs. Bank of Idaho | First Bancshares vs. Community Heritage Financial | First Bancshares vs. National Capital Bank |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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