Correlation Between First Savings and First Capital
Can any of the company-specific risk be diversified away by investing in both First Savings and First Capital 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 Savings and First Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Savings Financial and First Capital, you can compare the effects of market volatilities on First Savings and First Capital 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 Savings with a short position of First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Savings and First Capital.
Diversification Opportunities for First Savings and First Capital
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and First is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding First Savings Financial and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital and First Savings 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 Savings Financial are associated (or correlated) with First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of First Savings i.e., First Savings and First Capital go up and down completely randomly.
Pair Corralation between First Savings and First Capital
Given the investment horizon of 90 days First Savings Financial is expected to generate 1.08 times more return on investment than First Capital. However, First Savings is 1.08 times more volatile than First Capital. It trades about 0.09 of its potential returns per unit of risk. First Capital is currently generating about 0.02 per unit of risk. If you would invest 2,600 in First Savings Financial on July 20, 2025 and sell it today you would earn a total of 365.00 from holding First Savings Financial or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Savings Financial vs. First Capital
Performance |
| Timeline |
| First Savings Financial |
| First Capital |
First Savings and First Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Savings and First Capital
The main advantage of trading using opposite First Savings and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Savings position performs unexpectedly, First Capital 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 First Capital will offset losses from the drop in First Capital's long position.| First Savings vs. Investar Holding Corp | First Savings vs. Virginia National Bankshares | First Savings vs. LCNB Corporation | First Savings vs. First United |
| First Capital vs. Eagle Bancorp Montana | First Capital vs. Richmond Mutual Bancorporation | First Capital vs. Landmark Bancorp | First Capital vs. Finward 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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