Correlation Between First State and Mars Bancorp
Can any of the company-specific risk be diversified away by investing in both First State and Mars 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 State and Mars Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First State Financial and Mars Bancorp, you can compare the effects of market volatilities on First State and Mars 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 State with a short position of Mars Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and Mars Bancorp.
Diversification Opportunities for First State and Mars Bancorp
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Mars is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and Mars Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Bancorp and First State 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 State Financial are associated (or correlated) with Mars Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Bancorp has no effect on the direction of First State i.e., First State and Mars Bancorp go up and down completely randomly.
Pair Corralation between First State and Mars Bancorp
If you would invest 1,285 in Mars Bancorp on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Mars Bancorp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First State Financial vs. Mars Bancorp
Performance |
| Timeline |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Mars Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First State and Mars Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and Mars Bancorp
The main advantage of trading using opposite First State and Mars Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State position performs unexpectedly, Mars 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 Mars Bancorp will offset losses from the drop in Mars Bancorp's long position.| First State vs. First Interstate BancSystem | First State vs. First Financial Bankshares | First State vs. Independent Bank Group | First State vs. CVB Financial |
| Mars Bancorp vs. Potomac Bancshares | Mars Bancorp vs. Apollo Bancorp | Mars Bancorp vs. The Farmers Bank | Mars Bancorp vs. Community Bankers |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |