Correlation Between Peoples Bancorp and First Interstate
Can any of the company-specific risk be diversified away by investing in both Peoples Bancorp and First Interstate 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 Peoples Bancorp and First Interstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peoples Bancorp and First Interstate BancSystem, you can compare the effects of market volatilities on Peoples Bancorp and First Interstate 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 Peoples Bancorp with a short position of First Interstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Bancorp and First Interstate.
Diversification Opportunities for Peoples Bancorp and First Interstate
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Peoples and First is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Bancorp and First Interstate BancSystem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Interstate Ban and Peoples Bancorp 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 Peoples Bancorp are associated (or correlated) with First Interstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Interstate Ban has no effect on the direction of Peoples Bancorp i.e., Peoples Bancorp and First Interstate go up and down completely randomly.
Pair Corralation between Peoples Bancorp and First Interstate
Given the investment horizon of 90 days Peoples Bancorp is expected to generate 0.73 times more return on investment than First Interstate. However, Peoples Bancorp is 1.37 times less risky than First Interstate. It trades about 0.17 of its potential returns per unit of risk. First Interstate BancSystem is currently generating about 0.09 per unit of risk. If you would invest 3,123 in Peoples Bancorp on November 3, 2024 and sell it today you would earn a total of 142.00 from holding Peoples Bancorp or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peoples Bancorp vs. First Interstate BancSystem
Performance |
| Timeline |
| Peoples Bancorp |
| First Interstate Ban |
Peoples Bancorp and First Interstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Bancorp and First Interstate
The main advantage of trading using opposite Peoples Bancorp and First Interstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Bancorp position performs unexpectedly, First Interstate 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 Interstate will offset losses from the drop in First Interstate's long position.| Peoples Bancorp vs. Eagle Bancorp | Peoples Bancorp vs. Northrim BanCorp | Peoples Bancorp vs. United Bankshares | Peoples Bancorp vs. Pacific Premier Bancorp |
| First Interstate vs. First Financial Bankshares | First Interstate vs. CVB Financial | First Interstate vs. Eagle Bancorp Montana | First Interstate vs. Glacier 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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