Correlation Between 1ST SUMMIT and First Bankers
Can any of the company-specific risk be diversified away by investing in both 1ST SUMMIT and First Bankers 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 1ST SUMMIT and First Bankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1ST SUMMIT BANCORP and First Bankers Trustshares, you can compare the effects of market volatilities on 1ST SUMMIT and First Bankers 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 1ST SUMMIT with a short position of First Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1ST SUMMIT and First Bankers.
Diversification Opportunities for 1ST SUMMIT and First Bankers
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 1ST and First is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding 1ST SUMMIT BANCORP and First Bankers Trustshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bankers Trustshares and 1ST SUMMIT 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 1ST SUMMIT BANCORP are associated (or correlated) with First Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bankers Trustshares has no effect on the direction of 1ST SUMMIT i.e., 1ST SUMMIT and First Bankers go up and down completely randomly.
Pair Corralation between 1ST SUMMIT and First Bankers
Given the investment horizon of 90 days 1ST SUMMIT BANCORP is expected to under-perform the First Bankers. In addition to that, 1ST SUMMIT is 1.43 times more volatile than First Bankers Trustshares. It trades about -0.09 of its total potential returns per unit of risk. First Bankers Trustshares is currently generating about 0.02 per unit of volatility. If you would invest 1,614 in First Bankers Trustshares on August 29, 2024 and sell it today you would earn a total of 71.00 from holding First Bankers Trustshares or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.24% |
| Values | Daily Returns |
1ST SUMMIT BANCORP vs. First Bankers Trustshares
Performance |
| Timeline |
| 1ST SUMMIT BANCORP |
| First Bankers Trustshares |
1ST SUMMIT and First Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1ST SUMMIT and First Bankers
The main advantage of trading using opposite 1ST SUMMIT and First Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1ST SUMMIT position performs unexpectedly, First Bankers 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 Bankers will offset losses from the drop in First Bankers' long position.| 1ST SUMMIT vs. Apollo Bancorp | 1ST SUMMIT vs. Oregon Pacific Bancorp | 1ST SUMMIT vs. The Farmers Bank | 1ST SUMMIT vs. Community Bankers |
| First Bankers vs. Greenville Federal Financial | First Bankers vs. First Ottawa Bancshares | First Bankers vs. Coastal Carolina Bancshares | First Bankers vs. Citizens Bancorp Investment |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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