Correlation Between NYSE Composite and First Bancshares
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and First Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and First Bancshares, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of First Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and First Bancshares.
Diversification Opportunities for NYSE Composite and First Bancshares
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and First is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and First Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancshares and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and First Bancshares go up and down completely randomly.
Pair Corralation between NYSE Composite and First Bancshares
If you would invest 1,920,711 in NYSE Composite on October 23, 2024 and sell it today you would earn a total of 40,026 from holding NYSE Composite or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
NYSE Composite vs. First Bancshares
Performance |
| Timeline |
NYSE Composite and First Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
First Bancshares
Pair trading matchups for First Bancshares
Pair Trading with NYSE Composite and First Bancshares
The main advantage of trading using opposite NYSE Composite and First Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. IPG Photonics | NYSE Composite vs. Summit Materials | NYSE Composite vs. NetSol Technologies | NYSE Composite vs. Bill Com Holdings |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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