Correlation Between International Bancshares and First Bank
Can any of the company-specific risk be diversified away by investing in both International Bancshares and First Bank 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 International Bancshares and First Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Bancshares and First Bank, you can compare the effects of market volatilities on International Bancshares and First Bank 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 International Bancshares with a short position of First Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Bancshares and First Bank.
Diversification Opportunities for International Bancshares and First Bank
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and First is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding International Bancshares and First Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bank and International Bancshares 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 International Bancshares are associated (or correlated) with First Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bank has no effect on the direction of International Bancshares i.e., International Bancshares and First Bank go up and down completely randomly.
Pair Corralation between International Bancshares and First Bank
Given the investment horizon of 90 days International Bancshares is expected to generate 1.77 times more return on investment than First Bank. However, International Bancshares is 1.77 times more volatile than First Bank. It trades about 0.22 of its potential returns per unit of risk. First Bank is currently generating about 0.2 per unit of risk. If you would invest 6,164 in International Bancshares on September 4, 2024 and sell it today you would earn a total of 1,043 from holding International Bancshares or generate 16.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Bancshares vs. First Bank
Performance |
| Timeline |
| International Bancshares |
| First Bank |
International Bancshares and First Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Bancshares and First Bank
The main advantage of trading using opposite International Bancshares and First Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Bancshares position performs unexpectedly, First Bank 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 Bank will offset losses from the drop in First Bank's long position.| International Bancshares vs. Home Federal Bancorp | International Bancshares vs. First Financial Northwest | International Bancshares vs. First Northwest Bancorp | International Bancshares vs. First Capital |
| First Bank vs. International Bancshares | First Bank vs. Finward Bancorp | First Bank vs. Aquagold International | First Bank vs. Thrivent High Yield |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |