Correlation Between RBB Bancorp and First Mid
Can any of the company-specific risk be diversified away by investing in both RBB Bancorp and First Mid 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 RBB Bancorp and First Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBB Bancorp and First Mid Illinois, you can compare the effects of market volatilities on RBB Bancorp and First Mid 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 RBB Bancorp with a short position of First Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBB Bancorp and First Mid.
Diversification Opportunities for RBB Bancorp and First Mid
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RBB and First is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding RBB Bancorp and First Mid Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mid Illinois and RBB 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 RBB Bancorp are associated (or correlated) with First Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mid Illinois has no effect on the direction of RBB Bancorp i.e., RBB Bancorp and First Mid go up and down completely randomly.
Pair Corralation between RBB Bancorp and First Mid
Considering the 90-day investment horizon RBB Bancorp is expected to under-perform the First Mid. In addition to that, RBB Bancorp is 1.23 times more volatile than First Mid Illinois. It trades about -0.16 of its total potential returns per unit of risk. First Mid Illinois is currently generating about 0.17 per unit of volatility. If you would invest 3,597 in First Mid Illinois on November 3, 2024 and sell it today you would earn a total of 196.00 from holding First Mid Illinois or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBB Bancorp vs. First Mid Illinois
Performance |
| Timeline |
| RBB Bancorp |
| First Mid Illinois |
RBB Bancorp and First Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBB Bancorp and First Mid
The main advantage of trading using opposite RBB Bancorp and First Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBB Bancorp position performs unexpectedly, First Mid 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 Mid will offset losses from the drop in First Mid's long position.| RBB Bancorp vs. OP Bancorp | RBB Bancorp vs. Hanmi Financial | RBB Bancorp vs. Hope Bancorp | RBB Bancorp vs. Northeast Bancorp |
| First Mid vs. Finward Bancorp | First Mid vs. Great Southern Bancorp | First Mid vs. Franklin Financial Services | First Mid vs. Community West Bancshares |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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