Correlation Between First Financial and Equity Bancshares,

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

By analyzing existing cross correlation between First Financial Bankshares and Equity Bancshares,, you can compare the effects of market volatilities on First Financial and Equity Bancshares, 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 Equity Bancshares,. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Financial and Equity Bancshares,.

Diversification Opportunities for First Financial and Equity Bancshares,

0.93

Correlation Coefficient

First Financial  Equity Bancshares,

Almost no diversification

The 3 months correlation between First and Equity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding First Financial Bankshares and Equity Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Bancshares, 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 Bankshares are associated (or correlated) with Equity Bancshares,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Bancshares, has no effect on the direction of First Financial i.e., First Financial and Equity Bancshares, go up and down completely randomly.

Pair Corralation between First Financial and Equity Bancshares,

Given the investment horizon of 90 days First Financial is expected to generate 1.14 times less return on investment than Equity Bancshares,. In addition to that, First Financial is 1.02 times more volatile than Equity Bancshares,. It trades about 0.11 of its total potential returns per unit of risk. Equity Bancshares, is currently generating about 0.12 per unit of volatility. If you would invest  2,373  in Equity Bancshares, on June 23, 2024 and sell it today you would earn a total of  1,800  from holding Equity Bancshares, or generate 75.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

First Financial Bankshares  vs.  Equity Bancshares,

First Financial Bank

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Financial Bankshares are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, First Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Equity Bancshares,

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Bancshares, are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Equity Bancshares, disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Financial and Equity Bancshares,

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

The idea behind First Financial Bankshares and Equity Bancshares, 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.

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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 Valuation module to check real value of public entities based on technical and fundamental data.