Correlation Between First Community and OP Bancorp
Can any of the company-specific risk be diversified away by investing in both First Community and OP Bancorp 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 OP Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Community and OP Bancorp, you can compare the effects of market volatilities on First Community and OP Bancorp 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 OP Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Community and OP Bancorp.
Diversification Opportunities for First Community and OP Bancorp
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and OPBK is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding First Community and OP Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OP Bancorp 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 OP Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OP Bancorp has no effect on the direction of First Community i.e., First Community and OP Bancorp go up and down completely randomly.
Pair Corralation between First Community and OP Bancorp
Given the investment horizon of 90 days First Community is expected to generate 0.86 times more return on investment than OP Bancorp. However, First Community is 1.17 times less risky than OP Bancorp. It trades about 0.07 of its potential returns per unit of risk. OP Bancorp is currently generating about -0.05 per unit of risk. If you would invest 2,590 in First Community on August 21, 2025 and sell it today you would earn a total of 161.00 from holding First Community or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Community vs. OP Bancorp
Performance |
| Timeline |
| First Community |
| OP Bancorp |
First Community and OP Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Community and OP Bancorp
The main advantage of trading using opposite First Community and OP Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Community position performs unexpectedly, OP Bancorp 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 OP Bancorp will offset losses from the drop in OP Bancorp's long position.| First Community vs. Avidbank Holdings, Common | First Community vs. Virginia National Bankshares | First Community vs. First Savings Financial | First Community vs. Franklin Financial Services |
| OP Bancorp vs. Chain Bridge Bancorp, | OP Bancorp vs. Mainstreet Bank | OP Bancorp vs. First Savings Financial | OP Bancorp vs. Avidbank Holdings, Common |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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