Correlation Between Tectonic Financial and First Bancshares,
Can any of the company-specific risk be diversified away by investing in both Tectonic Financial and First Bancshares, 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 Tectonic Financial and First Bancshares, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tectonic Financial PR and The First Bancshares,, you can compare the effects of market volatilities on Tectonic Financial and First Bancshares, 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 Tectonic Financial with a short position of First Bancshares,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and First Bancshares,.
Diversification Opportunities for Tectonic Financial and First Bancshares,
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tectonic and First is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR and The First Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancshares, and Tectonic Financial 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 Tectonic Financial PR are associated (or correlated) with First Bancshares,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancshares, has no effect on the direction of Tectonic Financial i.e., Tectonic Financial and First Bancshares, go up and down completely randomly.
Pair Corralation between Tectonic Financial and First Bancshares,
Assuming the 90 days horizon Tectonic Financial is expected to generate 3.01 times less return on investment than First Bancshares,. But when comparing it to its historical volatility, Tectonic Financial PR is 3.19 times less risky than First Bancshares,. It trades about 0.08 of its potential returns per unit of risk. The First Bancshares, is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,437 in The First Bancshares, on August 28, 2024 and sell it today you would earn a total of 1,385 from holding The First Bancshares, or generate 56.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tectonic Financial PR vs. The First Bancshares,
Performance |
| Timeline |
| Tectonic Financial |
| First Bancshares, |
Tectonic Financial and First Bancshares, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tectonic Financial and First Bancshares,
The main advantage of trading using opposite Tectonic Financial and First Bancshares, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic Financial position performs unexpectedly, First Bancshares, 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 Bancshares, will offset losses from the drop in First Bancshares,'s long position.| Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Absa Group Limited |
| First Bancshares, vs. Fifth Third Bancorp | First Bancshares, vs. Huntington Bancshares Incorporated | First Bancshares, vs. MT Bank |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |