Correlation Between First Financial and Alpine Banks
Can any of the company-specific risk be diversified away by investing in both First Financial and Alpine Banks 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 First Financial and Alpine Banks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Financial and Alpine Banks of, you can compare the effects of market volatilities on First Financial and Alpine Banks 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 First Financial with a short position of Alpine Banks. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Financial and Alpine Banks.
Diversification Opportunities for First Financial and Alpine Banks
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Alpine is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding First Financial and Alpine Banks of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Banks and First 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 First Financial are associated (or correlated) with Alpine Banks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Banks has no effect on the direction of First Financial i.e., First Financial and Alpine Banks go up and down completely randomly.
Pair Corralation between First Financial and Alpine Banks
Given the investment horizon of 90 days First Financial is expected to generate 1.52 times less return on investment than Alpine Banks. In addition to that, First Financial is 2.89 times more volatile than Alpine Banks of. It trades about 0.07 of its total potential returns per unit of risk. Alpine Banks of is currently generating about 0.31 per unit of volatility. If you would invest 2,920 in Alpine Banks of on September 26, 2024 and sell it today you would earn a total of 503.00 from holding Alpine Banks of or generate 17.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
First Financial vs. Alpine Banks of
Performance |
Timeline |
First Financial |
Alpine Banks |
First Financial and Alpine Banks Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Financial and Alpine Banks
The main advantage of trading using opposite First Financial and Alpine Banks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Financial position performs unexpectedly, Alpine Banks 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 Alpine Banks will offset losses from the drop in Alpine Banks' long position.First Financial vs. Chemung Financial Corp | First Financial vs. Citizens Northern Corp | First Financial vs. National Bankshares | First Financial vs. Fidelity DD Bancorp |
Alpine Banks vs. Banco Bradesco SA | Alpine Banks vs. Itau Unibanco Banco | Alpine Banks vs. Deutsche Bank AG | Alpine Banks vs. Banco Santander Brasil |
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
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Money Managers Screen money managers from public funds and ETFs managed around the world |