Correlation Between Renasant and First Bancshares,
Can any of the company-specific risk be diversified away by investing in both Renasant 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 Renasant and First Bancshares, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renasant and The First Bancshares,, you can compare the effects of market volatilities on Renasant 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 Renasant with a short position of First Bancshares,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renasant and First Bancshares,.
Diversification Opportunities for Renasant and First Bancshares,
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Renasant and First is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Renasant and The First Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancshares, and Renasant 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 Renasant 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 Renasant i.e., Renasant and First Bancshares, go up and down completely randomly.
Pair Corralation between Renasant and First Bancshares,
Given the investment horizon of 90 days Renasant is expected to generate 1.18 times less return on investment than First Bancshares,. But when comparing it to its historical volatility, Renasant is 1.05 times less risky than First Bancshares,. It trades about 0.15 of its potential returns per unit of risk. The First Bancshares, is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,403 in The First Bancshares, on August 29, 2024 and sell it today you would earn a total of 404.00 from holding The First Bancshares, or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renasant vs. The First Bancshares,
Performance |
| Timeline |
| Renasant |
| First Bancshares, |
Renasant and First Bancshares, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renasant and First Bancshares,
The main advantage of trading using opposite Renasant and First Bancshares, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renasant 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,'s long position.| Renasant vs. Simmons First National | Renasant vs. Trustmark | Renasant vs. Sandy Spring Bancorp | Renasant vs. Stock Yards Bancorp |
| First Bancshares, vs. First Northwest Bancorp | First Bancshares, vs. Community West Bancshares | First Bancshares, vs. First Financial Northwest | First Bancshares, 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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