Correlation Between Hancock Whitney and FB Financial
Can any of the company-specific risk be diversified away by investing in both Hancock Whitney and FB Financial 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 Hancock Whitney and FB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hancock Whitney Corp and FB Financial Corp, you can compare the effects of market volatilities on Hancock Whitney and FB Financial 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 Hancock Whitney with a short position of FB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hancock Whitney and FB Financial.
Diversification Opportunities for Hancock Whitney and FB Financial
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hancock and FBK is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Hancock Whitney Corp and FB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FB Financial Corp and Hancock Whitney 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 Hancock Whitney Corp are associated (or correlated) with FB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FB Financial Corp has no effect on the direction of Hancock Whitney i.e., Hancock Whitney and FB Financial go up and down completely randomly.
Pair Corralation between Hancock Whitney and FB Financial
Considering the 90-day investment horizon Hancock Whitney is expected to generate 1.07 times less return on investment than FB Financial. In addition to that, Hancock Whitney is 1.01 times more volatile than FB Financial Corp. It trades about 0.18 of its total potential returns per unit of risk. FB Financial Corp is currently generating about 0.19 per unit of volatility. If you would invest 4,903 in FB Financial Corp on September 1, 2024 and sell it today you would earn a total of 742.00 from holding FB Financial Corp or generate 15.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hancock Whitney Corp vs. FB Financial Corp
Performance |
| Timeline |
| Hancock Whitney Corp |
| FB Financial Corp |
Hancock Whitney and FB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hancock Whitney and FB Financial
The main advantage of trading using opposite Hancock Whitney and FB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hancock Whitney position performs unexpectedly, FB Financial 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 FB Financial will offset losses from the drop in FB Financial's long position.| Hancock Whitney vs. Home Bancorp | Hancock Whitney vs. First Business Financial | Hancock Whitney vs. LINKBANCORP | Hancock Whitney vs. Great Southern Bancorp |
| FB Financial vs. Affinity Bancshares | FB Financial vs. Southern California Bancorp | FB Financial vs. Auburn National Bancorporation | FB Financial vs. BayCom Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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