Correlation Between Tectonic Financial and First State
Can any of the company-specific risk be diversified away by investing in both Tectonic Financial and First State 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 State 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 First State Financial, you can compare the effects of market volatilities on Tectonic Financial and First State 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 State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and First State.
Diversification Opportunities for Tectonic Financial and First State
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tectonic and First is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR and First State Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First State Financial 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 State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First State Financial has no effect on the direction of Tectonic Financial i.e., Tectonic Financial and First State go up and down completely randomly.
Pair Corralation between Tectonic Financial and First State
If you would invest 1,006 in Tectonic Financial PR on August 31, 2024 and sell it today you would earn a total of 29.00 from holding Tectonic Financial PR or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Tectonic Financial PR vs. First State Financial
Performance |
| Timeline |
| Tectonic Financial |
| First State Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tectonic Financial and First State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tectonic Financial and First State
The main advantage of trading using opposite Tectonic Financial and First State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic Financial position performs unexpectedly, First State 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 State will offset losses from the drop in First State's long position.| Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Bridgewater Bancshares Depositary |
| First State vs. First Interstate BancSystem | First State vs. First Financial Bankshares | First State vs. Independent Bank Group | First State vs. CVB Financial |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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