Correlation Between Plumas Bancorp and First National
Can any of the company-specific risk be diversified away by investing in both Plumas Bancorp 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 Plumas Bancorp and First National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plumas Bancorp and First National Bank, you can compare the effects of market volatilities on Plumas Bancorp 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 Plumas Bancorp with a short position of First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plumas Bancorp and First National.
Diversification Opportunities for Plumas Bancorp and First National
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Plumas and First is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Plumas Bancorp 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 Plumas 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 Plumas Bancorp 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 Plumas Bancorp i.e., Plumas Bancorp and First National go up and down completely randomly.
Pair Corralation between Plumas Bancorp and First National
Given the investment horizon of 90 days Plumas Bancorp is expected to generate 0.59 times more return on investment than First National. However, Plumas Bancorp is 1.7 times less risky than First National. It trades about 0.27 of its potential returns per unit of risk. First National Bank is currently generating about 0.07 per unit of risk. If you would invest 4,554 in Plumas Bancorp on September 13, 2024 and sell it today you would earn a total of 331.00 from holding Plumas Bancorp or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plumas Bancorp vs. First National Bank
Performance |
| Timeline |
| Plumas Bancorp |
| First National Bank |
Plumas Bancorp and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plumas Bancorp and First National
The main advantage of trading using opposite Plumas Bancorp and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plumas Bancorp 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.| Plumas Bancorp vs. Comerica | Plumas Bancorp vs. Truist Financial Corp | Plumas Bancorp vs. Fifth Third Bancorp | Plumas Bancorp vs. Zions Bancorporation |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |