Correlation Between SVB T and First Capital
Can any of the company-specific risk be diversified away by investing in both SVB T and First Capital 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 SVB T and First Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SVB T Corp and First Capital, you can compare the effects of market volatilities on SVB T and First Capital 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 SVB T with a short position of First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVB T and First Capital.
Diversification Opportunities for SVB T and First Capital
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SVB and First is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SVB T Corp and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital and SVB T 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 SVB T Corp are associated (or correlated) with First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of SVB T i.e., SVB T and First Capital go up and down completely randomly.
Pair Corralation between SVB T and First Capital
Given the investment horizon of 90 days SVB T is expected to generate 1.1 times less return on investment than First Capital. But when comparing it to its historical volatility, SVB T Corp is 1.74 times less risky than First Capital. It trades about 0.09 of its potential returns per unit of risk. First Capital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,536 in First Capital on August 25, 2024 and sell it today you would earn a total of 742.00 from holding First Capital or generate 29.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 60.66% |
| Values | Daily Returns |
SVB T Corp vs. First Capital
Performance |
| Timeline |
| SVB T Corp |
| First Capital |
SVB T and First Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SVB T and First Capital
The main advantage of trading using opposite SVB T and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVB T position performs unexpectedly, First Capital 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 Capital will offset losses from the drop in First Capital's long position.| SVB T vs. Standard Bank Group | SVB T vs. PSB Holdings | SVB T vs. United Overseas Bank | SVB T vs. Turkiye Garanti Bankasi |
| First Capital vs. Home Federal Bancorp | First Capital vs. First Financial Northwest | First Capital vs. First Northwest Bancorp | First Capital 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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