Correlation Between Oconee Federal and First Capital
Can any of the company-specific risk be diversified away by investing in both Oconee Federal and First Capital 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 Oconee Federal and First Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oconee Federal Financial and First Capital, you can compare the effects of market volatilities on Oconee Federal and First Capital 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 Oconee Federal with a short position of First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oconee Federal and First Capital.
Diversification Opportunities for Oconee Federal and First Capital
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oconee and First is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oconee Federal Financial and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital and Oconee Federal 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 Oconee Federal Financial are associated (or correlated) with First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of Oconee Federal i.e., Oconee Federal and First Capital go up and down completely randomly.
Pair Corralation between Oconee Federal and First Capital
If you would invest 3,000 in First Capital on October 20, 2024 and sell it today you would earn a total of 86.00 from holding First Capital or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 5.26% |
| Values | Daily Returns |
Oconee Federal Financial vs. First Capital
Performance |
| Timeline |
| Oconee Federal Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Capital |
Oconee Federal and First Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oconee Federal and First Capital
The main advantage of trading using opposite Oconee Federal and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oconee Federal position performs unexpectedly, First Capital 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 Capital will offset losses from the drop in First Capital's long position.| Oconee Federal vs. Home Federal Bancorp | Oconee Federal vs. Community West Bancshares | Oconee Federal vs. Magyar Bancorp |
| First Capital vs. Home Bancorp | First Capital vs. First Business Financial | First Capital vs. LINKBANCORP | First Capital vs. Great Southern 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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