Correlation Between Amazon and BancFirst

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Can any of the company-specific risk be diversified away by investing in both Amazon 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 Amazon and BancFirst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and BancFirst, you can compare the effects of market volatilities on Amazon 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 Amazon with a short position of BancFirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and BancFirst.

Diversification Opportunities for Amazon and BancFirst

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Amazon and BancFirst is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and BancFirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BancFirst and Amazon 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 Amazon Inc 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 Amazon i.e., Amazon and BancFirst go up and down completely randomly.

Pair Corralation between Amazon and BancFirst

Given the investment horizon of 90 days Amazon is expected to generate 1.44 times less return on investment than BancFirst. In addition to that, Amazon is 1.88 times more volatile than BancFirst. It trades about 0.06 of its total potential returns per unit of risk. BancFirst is currently generating about 0.17 per unit of volatility. If you would invest  9,596  in BancFirst on September 5, 2022 and sell it today you would earn a total of  610.00  from holding BancFirst or generate 6.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Amazon Inc  vs.  BancFirst

 Performance (%) 
       Timeline  
Amazon Inc 
Amazon Performance
0 of 100
Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2023. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amazon Price Channel

BancFirst 
BancFirst Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BancFirst are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, BancFirst is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

BancFirst Price Channel

Amazon and BancFirst Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amazon and BancFirst

The main advantage of trading using opposite Amazon and BancFirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon 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.
Amazon vs. Carvana Co
The idea behind Amazon Inc 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.
BancFirst vs. Affinity Bancshares
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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