Correlation Between First Community and Ames National
Can any of the company-specific risk be diversified away by investing in both First Community and Ames National 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 Community and Ames National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Community and Ames National, you can compare the effects of market volatilities on First Community and Ames National 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 Community with a short position of Ames National. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and Ames National.
Diversification Opportunities for First Community and Ames National
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Ames is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding First Community and Ames National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ames National and First Community 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 Community are associated (or correlated) with Ames National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ames National has no effect on the direction of First Community i.e., First Community and Ames National go up and down completely randomly.
Pair Corralation between First Community and Ames National
If you would invest 2,081 in Ames National on September 2, 2025 and sell it today you would earn a total of 81.00 from holding Ames National or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
First Community vs. Ames National
Performance |
| Timeline |
| First Community |
Risk-Adjusted Performance
Mild
Weak | Strong |
| Ames National |
First Community and Ames National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Community and Ames National
The main advantage of trading using opposite First Community and Ames National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community position performs unexpectedly, Ames National 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 Ames National will offset losses from the drop in Ames National's long position.| First Community vs. Getty Copper | First Community vs. Hawaiian Hospitality Group | First Community vs. Copperbank Resources Corp | First Community vs. Evolution Mining Limited |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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