Correlation Between Inter Co and First National
Can any of the company-specific risk be diversified away by investing in both Inter Co and First National 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 Inter Co and First National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inter Co Class and First National Bank, you can compare the effects of market volatilities on Inter Co and First National 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 Inter Co with a short position of First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Co and First National.
Diversification Opportunities for Inter Co and First National
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Inter and First is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Inter Co Class and First National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Bank and Inter Co 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 Inter Co Class are associated (or correlated) with First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Bank has no effect on the direction of Inter Co i.e., Inter Co and First National go up and down completely randomly.
Pair Corralation between Inter Co and First National
Given the investment horizon of 90 days Inter Co Class is expected to under-perform the First National. In addition to that, Inter Co is 1.69 times more volatile than First National Bank. It trades about -0.18 of its total potential returns per unit of risk. First National Bank is currently generating about 0.15 per unit of volatility. If you would invest 19,469 in First National Bank on September 12, 2024 and sell it today you would earn a total of 3,531 from holding First National Bank or generate 18.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Inter Co Class vs. First National Bank
Performance |
| Timeline |
| Inter Co Class |
| First National Bank |
Inter Co and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inter Co and First National
The main advantage of trading using opposite Inter Co and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Co position performs unexpectedly, First National 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 National will offset losses from the drop in First National's long position.| Inter Co vs. Community West Bancshares | Inter Co vs. First Financial Northwest | Inter Co vs. First Northwest Bancorp | Inter Co vs. First Capital |
| First National vs. IF Bancorp | First National vs. LINKBANCORP | First National vs. Pathfinder Bancorp | First National vs. First Keystone 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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