Correlation Between BancFirst and Thrivent Partner

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

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

Diversification Opportunities for BancFirst and Thrivent Partner

-0.35

Correlation Coefficient

BancFirst  Thrivent Partner

Very good diversification

The 3 months correlation between BancFirst and Thrivent is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding BancFirst and Thrivent Partner Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Partner Wor and BancFirst 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 BancFirst are associated (or correlated) with Thrivent Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Partner Wor has no effect on the direction of BancFirst i.e., BancFirst and Thrivent Partner go up and down completely randomly.

Pair Corralation between BancFirst and Thrivent Partner

Given the investment horizon of 90 days BancFirst is expected to generate 3.33 times more return on investment than Thrivent Partner. However, BancFirst is 3.33 times more volatile than Thrivent Partner Worldwide. It trades about 0.16 of its potential returns per unit of risk. Thrivent Partner Worldwide is currently generating about -0.14 per unit of risk. If you would invest  8,480  in BancFirst on January 26, 2024 and sell it today you would earn a total of  677.00  from holding BancFirst or generate 7.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BancFirst  vs.  Thrivent Partner Worldwide

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Thrivent Partner Wor

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Partner Worldwide are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Thrivent Partner is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BancFirst and Thrivent Partner

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

The idea behind BancFirst and Thrivent Partner Worldwide 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.