Correlation Between First Savings and First Business
Can any of the company-specific risk be diversified away by investing in both First Savings and First 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 Savings and First Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Savings Financial and First Business Financial, you can compare the effects of market volatilities on First Savings and First 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 Savings with a short position of First Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Savings and First Business.
Diversification Opportunities for First Savings and First Business
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and First is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding First Savings Financial and First Business Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Business Financial and First Savings 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 Savings Financial are associated (or correlated) with First Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Business Financial has no effect on the direction of First Savings i.e., First Savings and First Business go up and down completely randomly.
Pair Corralation between First Savings and First Business
Given the investment horizon of 90 days First Savings Financial is expected to generate 1.05 times more return on investment than First Business. However, First Savings is 1.05 times more volatile than First Business Financial. It trades about 0.15 of its potential returns per unit of risk. First Business Financial is currently generating about 0.13 per unit of risk. If you would invest 2,996 in First Savings Financial on November 14, 2025 and sell it today you would earn a total of 402.00 from holding First Savings Financial or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.33% |
| Values | Daily Returns |
First Savings Financial vs. First Business Financial
Performance |
| Timeline |
| First Savings Financial |
Risk-Adjusted Performance
Good
Weak | Strong |
| First Business Financial |
First Savings and First Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Savings and First Business
The main advantage of trading using opposite First Savings and First Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Savings position performs unexpectedly, First 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 First Business will offset losses from the drop in First Business' long position.| First Savings vs. The Victory Bancorp | First Savings vs. MF Bancorp | First Savings vs. First Community Financial | First Savings vs. Andover Bancorp |
| First Business vs. Home Bancorp | First Business vs. Northfield Bancorp | First Business vs. Red River Bancshares | First Business vs. Civista Bancshares |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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