Correlation Between Zions Bancorporation and Bank First
Can any of the company-specific risk be diversified away by investing in both Zions Bancorporation and Bank First 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 Zions Bancorporation and Bank First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zions Bancorporation and Bank First National, you can compare the effects of market volatilities on Zions Bancorporation and Bank First 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 Zions Bancorporation with a short position of Bank First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zions Bancorporation and Bank First.
Diversification Opportunities for Zions Bancorporation and Bank First
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zions and Bank is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Zions Bancorp. and Bank First National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank First National and Zions Bancorporation 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 Zions Bancorporation are associated (or correlated) with Bank First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank First National has no effect on the direction of Zions Bancorporation i.e., Zions Bancorporation and Bank First go up and down completely randomly.
Pair Corralation between Zions Bancorporation and Bank First
Given the investment horizon of 90 days Zions Bancorporation is expected to generate 1.07 times more return on investment than Bank First. However, Zions Bancorporation is 1.07 times more volatile than Bank First National. It trades about 0.14 of its potential returns per unit of risk. Bank First National is currently generating about 0.09 per unit of risk. If you would invest 4,888 in Zions Bancorporation on August 29, 2024 and sell it today you would earn a total of 1,223 from holding Zions Bancorporation or generate 25.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zions Bancorp. vs. Bank First National
Performance |
| Timeline |
| Zions Bancorporation |
| Bank First National |
Zions Bancorporation and Bank First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zions Bancorporation and Bank First
The main advantage of trading using opposite Zions Bancorporation and Bank First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zions Bancorporation position performs unexpectedly, Bank First 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 Bank First will offset losses from the drop in Bank First's long position.| Zions Bancorporation vs. KeyCorp | Zions Bancorporation vs. Comerica | Zions Bancorporation vs. First Horizon National | Zions Bancorporation vs. Western Alliance Bancorporation |
| Bank First vs. Norwood Financial Corp | Bank First vs. Chemung Financial Corp | Bank First vs. Home Federal Bancorp | Bank First vs. Rhinebeck 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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