Correlation Between Zions Bancorporation and First Guaranty
Can any of the company-specific risk be diversified away by investing in both Zions Bancorporation and First Guaranty 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 First Guaranty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zions Bancorporation National and First Guaranty Bancshares, you can compare the effects of market volatilities on Zions Bancorporation and First Guaranty 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 First Guaranty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zions Bancorporation and First Guaranty.
Diversification Opportunities for Zions Bancorporation and First Guaranty
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zions and First is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Zions Bancorp. National and First Guaranty Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Guaranty Bancshares 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 National are associated (or correlated) with First Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Guaranty Bancshares has no effect on the direction of Zions Bancorporation i.e., Zions Bancorporation and First Guaranty go up and down completely randomly.
Pair Corralation between Zions Bancorporation and First Guaranty
Assuming the 90 days horizon Zions Bancorporation National is expected to under-perform the First Guaranty. In addition to that, Zions Bancorporation is 1.13 times more volatile than First Guaranty Bancshares. It trades about -0.3 of its total potential returns per unit of risk. First Guaranty Bancshares is currently generating about -0.2 per unit of volatility. If you would invest 2,214 in First Guaranty Bancshares on September 13, 2024 and sell it today you would lose (74.00) from holding First Guaranty Bancshares or give up 3.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Zions Bancorp. National vs. First Guaranty Bancshares
Performance |
| Timeline |
| Zions Bancorporation |
| First Guaranty Bancshares |
Zions Bancorporation and First Guaranty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zions Bancorporation and First Guaranty
The main advantage of trading using opposite Zions Bancorporation and First Guaranty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zions Bancorporation position performs unexpectedly, First Guaranty 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 Guaranty will offset losses from the drop in First Guaranty's long position.| Zions Bancorporation vs. Capital One Financial | Zions Bancorporation vs. Capital One Financial | Zions Bancorporation vs. Bank of America |
| First Guaranty vs. Capital One Financial | First Guaranty vs. Capital One Financial | First Guaranty vs. Bank of America |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |