Correlation Between Barclays PLC and BancFirst
Can any of the company-specific risk be diversified away by investing in both Barclays PLC 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 Barclays PLC and BancFirst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays PLC ADR and BancFirst, you can compare the effects of market volatilities on Barclays PLC 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 Barclays PLC with a short position of BancFirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays PLC and BancFirst.
Diversification Opportunities for Barclays PLC and BancFirst
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barclays and BancFirst is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Barclays PLC ADR and BancFirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BancFirst and Barclays PLC 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 Barclays PLC ADR 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 Barclays PLC i.e., Barclays PLC and BancFirst go up and down completely randomly.
Pair Corralation between Barclays PLC and BancFirst
Considering the 90-day investment horizon Barclays PLC is expected to generate 1.84 times less return on investment than BancFirst. But when comparing it to its historical volatility, Barclays PLC ADR is 1.65 times less risky than BancFirst. It trades about 0.16 of its potential returns per unit of risk. BancFirst is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 8,480 in BancFirst on January 26, 2024 and sell it today you would earn a total of 756.00 from holding BancFirst or generate 8.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Barclays PLC ADR vs. BancFirst
Performance |
Timeline |
Barclays PLC ADR |
BancFirst |
Barclays PLC and BancFirst Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barclays PLC and BancFirst
The main advantage of trading using opposite Barclays PLC and BancFirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays PLC 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.Barclays PLC vs. Aquagold International | Barclays PLC vs. Thrivent High Yield | Barclays PLC vs. Morningstar Unconstrained Allocation | Barclays PLC vs. Via Renewables |
BancFirst vs. Glacier Bancorp | BancFirst vs. BOK Financial | BancFirst vs. First Financial Bancorp | BancFirst vs. First Bancorp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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