Correlation Between Greene County and BancFirst
Can any of the company-specific risk be diversified away by investing in both Greene County and BancFirst 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 Greene County and BancFirst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greene County Bancorp and BancFirst, you can compare the effects of market volatilities on Greene County and BancFirst 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 Greene County with a short position of BancFirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greene County and BancFirst.
Diversification Opportunities for Greene County and BancFirst
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Greene and BancFirst is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Greene County Bancorp and BancFirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BancFirst and Greene County 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 Greene County Bancorp are associated (or correlated) with BancFirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BancFirst has no effect on the direction of Greene County i.e., Greene County and BancFirst go up and down completely randomly.
Pair Corralation between Greene County and BancFirst
Given the investment horizon of 90 days Greene County Bancorp is expected to under-perform the BancFirst. In addition to that, Greene County is 1.11 times more volatile than BancFirst. It trades about -0.04 of its total potential returns per unit of risk. BancFirst is currently generating about 0.13 per unit of volatility. If you would invest 11,610 in BancFirst on November 3, 2024 and sell it today you would earn a total of 399.00 from holding BancFirst or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greene County Bancorp vs. BancFirst
Performance |
| Timeline |
| Greene County Bancorp |
| BancFirst |
Greene County and BancFirst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greene County and BancFirst
The main advantage of trading using opposite Greene County and BancFirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greene County position performs unexpectedly, BancFirst 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 BancFirst will offset losses from the drop in BancFirst's long position.| Greene County vs. Community West Bancshares | Greene County vs. First Northwest Bancorp | Greene County vs. Home Federal Bancorp | Greene County vs. First Financial Northwest |
| BancFirst vs. Glacier Bancorp | BancFirst vs. BOK Financial | BancFirst vs. First Financial Bancorp | BancFirst vs. First Bancorp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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