Correlation Between Security Bank and First Community
Can any of the company-specific risk be diversified away by investing in both Security Bank and First Community 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 Security Bank and First Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Security Bank and First Community, you can compare the effects of market volatilities on Security Bank and First Community 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 Security Bank with a short position of First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and First Community.
Diversification Opportunities for Security Bank and First Community
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Security and First is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community and Security Bank 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 Security Bank are associated (or correlated) with First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community has no effect on the direction of Security Bank i.e., Security Bank and First Community go up and down completely randomly.
Pair Corralation between Security Bank and First Community
If you would invest 2,444 in First Community on September 14, 2024 and sell it today you would earn a total of 151.00 from holding First Community or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Security Bank vs. First Community
Performance |
| Timeline |
| Security Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Community |
Security Bank and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and First Community
The main advantage of trading using opposite Security Bank and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, First Community 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 Community will offset losses from the drop in First Community's long position.| Security Bank vs. Merchants Marine Bancorp | Security Bank vs. First Bancorp | Security Bank vs. CNB Financial | Security Bank vs. MNB Holdings Corp |
| First Community vs. Community West Bancshares | First Community vs. First Financial Northwest | First Community vs. First Northwest Bancorp | First Community vs. Home Federal 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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