Correlation Between 1st Source and Popular
Can any of the company-specific risk be diversified away by investing in both 1st Source and Popular 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 1st Source and Popular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1st Source and Popular, you can compare the effects of market volatilities on 1st Source and Popular 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 1st Source with a short position of Popular. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1st Source and Popular.
Diversification Opportunities for 1st Source and Popular
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 1st and Popular is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding 1st Source and Popular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular and 1st Source 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 1st Source are associated (or correlated) with Popular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Popular has no effect on the direction of 1st Source i.e., 1st Source and Popular go up and down completely randomly.
Pair Corralation between 1st Source and Popular
Given the investment horizon of 90 days 1st Source is expected to generate 3.02 times more return on investment than Popular. However, 1st Source is 3.02 times more volatile than Popular. It trades about 0.2 of its potential returns per unit of risk. Popular is currently generating about -0.01 per unit of risk. If you would invest 5,777 in 1st Source on November 3, 2024 and sell it today you would earn a total of 495.00 from holding 1st Source or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
1st Source vs. Popular
Performance |
| Timeline |
| 1st Source |
| Popular |
1st Source and Popular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1st Source and Popular
The main advantage of trading using opposite 1st Source and Popular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1st Source position performs unexpectedly, Popular 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 Popular will offset losses from the drop in Popular's long position.| 1st Source vs. Penns Woods Bancorp | 1st Source vs. Great Southern Bancorp | 1st Source vs. Waterstone Financial | 1st Source vs. Chemung Financial Corp |
| Popular vs. Penns Woods Bancorp | Popular vs. 1st Source | Popular vs. Great Southern Bancorp | Popular vs. Waterstone Financial |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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