Correlation Between Third Coast and Esquire Financial
Can any of the company-specific risk be diversified away by investing in both Third Coast and Esquire Financial 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 Third Coast and Esquire Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Third Coast Bancshares and Esquire Financial Holdings, you can compare the effects of market volatilities on Third Coast and Esquire Financial 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 Third Coast with a short position of Esquire Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Third Coast and Esquire Financial.
Diversification Opportunities for Third Coast and Esquire Financial
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Third and Esquire is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Third Coast Bancshares and Esquire Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esquire Financial and Third Coast 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 Third Coast Bancshares are associated (or correlated) with Esquire Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esquire Financial has no effect on the direction of Third Coast i.e., Third Coast and Esquire Financial go up and down completely randomly.
Pair Corralation between Third Coast and Esquire Financial
Given the investment horizon of 90 days Third Coast is expected to generate 1.08 times less return on investment than Esquire Financial. In addition to that, Third Coast is 1.06 times more volatile than Esquire Financial Holdings. It trades about 0.17 of its total potential returns per unit of risk. Esquire Financial Holdings is currently generating about 0.19 per unit of volatility. If you would invest 6,002 in Esquire Financial Holdings on November 2, 2024 and sell it today you would earn a total of 2,740 from holding Esquire Financial Holdings or generate 45.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Third Coast Bancshares vs. Esquire Financial Holdings
Performance |
| Timeline |
| Third Coast Bancshares |
| Esquire Financial |
Third Coast and Esquire Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Third Coast and Esquire Financial
The main advantage of trading using opposite Third Coast and Esquire Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Third Coast position performs unexpectedly, Esquire Financial 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 Esquire Financial will offset losses from the drop in Esquire Financial's long position.| Third Coast vs. Byline Bancorp | Third Coast vs. Coastal Financial Corp | Third Coast vs. NBT Bancorp | Third Coast vs. Community West Bancshares |
| Esquire Financial vs. Home Federal Bancorp | Esquire Financial vs. First Financial Northwest | Esquire Financial vs. First Northwest Bancorp | Esquire Financial vs. First Capital |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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