Correlation Between Security Bank and First Bancorp
Can any of the company-specific risk be diversified away by investing in both Security Bank and First Bancorp 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 Bancorp 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 Bancorp, you can compare the effects of market volatilities on Security Bank and First Bancorp 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 Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and First Bancorp.
Diversification Opportunities for Security Bank and First Bancorp
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Security and First is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp 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 Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of Security Bank i.e., Security Bank and First Bancorp go up and down completely randomly.
Pair Corralation between Security Bank and First Bancorp
If you would invest 151.00 in Security Bank on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Security Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Security Bank vs. First Bancorp
Performance |
| Timeline |
| Security Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Bancorp |
Security Bank and First Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and First Bancorp
The main advantage of trading using opposite Security Bank and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, First Bancorp 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 Bancorp will offset losses from the drop in First Bancorp'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 Bancorp vs. LINKBANCORP | First Bancorp vs. Bankwell Financial Group | First Bancorp vs. FS Bancorp | First Bancorp vs. Finward 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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