Correlation Between Intercorp Financial and First Community
Can any of the company-specific risk be diversified away by investing in both Intercorp Financial and First Community 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 Intercorp Financial and First Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intercorp Financial Services and First Community, you can compare the effects of market volatilities on Intercorp Financial and First Community 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 Intercorp Financial with a short position of First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intercorp Financial and First Community.
Diversification Opportunities for Intercorp Financial and First Community
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intercorp and First is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Intercorp Financial Services and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community and Intercorp Financial 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 Intercorp Financial Services are associated (or correlated) with First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community has no effect on the direction of Intercorp Financial i.e., Intercorp Financial and First Community go up and down completely randomly.
Pair Corralation between Intercorp Financial and First Community
Considering the 90-day investment horizon Intercorp Financial is expected to generate 2.42 times less return on investment than First Community. But when comparing it to its historical volatility, Intercorp Financial Services is 1.15 times less risky than First Community. It trades about 0.19 of its potential returns per unit of risk. First Community is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 2,342 in First Community on September 4, 2024 and sell it today you would earn a total of 273.00 from holding First Community or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intercorp Financial Services vs. First Community
Performance |
| Timeline |
| Intercorp Financial |
| First Community |
Intercorp Financial and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intercorp Financial and First Community
The main advantage of trading using opposite Intercorp Financial and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intercorp Financial position performs unexpectedly, First Community 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 Community will offset losses from the drop in First Community's long position.| Intercorp Financial vs. International Bancshares | Intercorp Financial vs. Finward Bancorp | Intercorp Financial vs. Aquagold International | Intercorp Financial vs. Thrivent High Yield |
| First Community vs. Community West Bancshares | First Community vs. First Financial Northwest | First Community vs. First Northwest Bancorp | First Community vs. Home Federal 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |