Correlation Between Alternative Investment and BancFirst

Can any of the company-specific risk be diversified away by investing in both Alternative Investment and BancFirst 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 Alternative Investment and BancFirst into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alternative Investment and BancFirst, you can compare the effects of market volatilities on Alternative Investment and BancFirst 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 Alternative Investment with a short position of BancFirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Investment and BancFirst.

Diversification Opportunities for Alternative Investment and BancFirst

0.0

Correlation Coefficient

Alternative Investment  BancFirst

Pay attention - limited upside

The 3 months correlation between Alternative and BancFirst is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Investment and BancFirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BancFirst and Alternative Investment 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 Alternative Investment are associated (or correlated) with BancFirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BancFirst has no effect on the direction of Alternative Investment i.e., Alternative Investment and BancFirst go up and down completely randomly.

Pair Corralation between Alternative Investment and BancFirst

If you would invest  8,683  in BancFirst on January 20, 2024 and sell it today you would earn a total of  245.00  from holding BancFirst or generate 2.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Alternative Investment  vs.  BancFirst

Alternative Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alternative Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking signals, Alternative Investment is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

BancFirst

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BancFirst has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BancFirst is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Alternative Investment and BancFirst

The main advantage of trading using opposite Alternative Investment and BancFirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Investment position performs unexpectedly, BancFirst 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 BancFirst will offset losses from the drop in BancFirst's long position.

The idea behind Alternative Investment and BancFirst pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.