Correlation Between National Capital and First Bancshares
Can any of the company-specific risk be diversified away by investing in both National Capital and First Bancshares 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 National Capital and First Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Capital Bank and First Bancshares, you can compare the effects of market volatilities on National Capital and First Bancshares 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 National Capital with a short position of First Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Capital and First Bancshares.
Diversification Opportunities for National Capital and First Bancshares
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and First is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding National Capital Bank and First Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancshares and National Capital 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 National Capital Bank are associated (or correlated) with First Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancshares has no effect on the direction of National Capital i.e., National Capital and First Bancshares go up and down completely randomly.
Pair Corralation between National Capital and First Bancshares
If you would invest 18,943 in National Capital Bank on August 28, 2024 and sell it today you would earn a total of 11,057 from holding National Capital Bank or generate 58.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
National Capital Bank vs. First Bancshares
Performance |
| Timeline |
| National Capital Bank |
| First Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
National Capital and First Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Capital and First Bancshares
The main advantage of trading using opposite National Capital and First Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Capital position performs unexpectedly, First Bancshares 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 Bancshares will offset losses from the drop in First Bancshares' long position.| National Capital vs. Delhi Bank Corp | National Capital vs. CCSB Financial Corp | National Capital vs. Bank of Utica | National Capital vs. BEO Bancorp |
| First Bancshares vs. Lewis Clark Bancorp | First Bancshares vs. Bank of Idaho | First Bancshares vs. Community Heritage Financial | First Bancshares vs. National Capital Bank |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |