Correlation Between FirstSun Capital and Preferred Bank
Can any of the company-specific risk be diversified away by investing in both FirstSun Capital and Preferred Bank 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 FirstSun Capital and Preferred Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstSun Capital Bancorp and Preferred Bank, you can compare the effects of market volatilities on FirstSun Capital and Preferred Bank 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 FirstSun Capital with a short position of Preferred Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstSun Capital and Preferred Bank.
Diversification Opportunities for FirstSun Capital and Preferred Bank
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between FirstSun and Preferred is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding FirstSun Capital Bancorp and Preferred Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Preferred Bank and FirstSun Capital 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 FirstSun Capital Bancorp are associated (or correlated) with Preferred Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Preferred Bank has no effect on the direction of FirstSun Capital i.e., FirstSun Capital and Preferred Bank go up and down completely randomly.
Pair Corralation between FirstSun Capital and Preferred Bank
Given the investment horizon of 90 days FirstSun Capital Bancorp is expected to under-perform the Preferred Bank. In addition to that, FirstSun Capital is 1.83 times more volatile than Preferred Bank. It trades about -0.06 of its total potential returns per unit of risk. Preferred Bank is currently generating about 0.01 per unit of volatility. If you would invest 9,126 in Preferred Bank on August 17, 2025 and sell it today you would lose (2.00) from holding Preferred Bank or give up 0.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FirstSun Capital Bancorp vs. Preferred Bank
Performance |
| Timeline |
| FirstSun Capital Bancorp |
| Preferred Bank |
FirstSun Capital and Preferred Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstSun Capital and Preferred Bank
The main advantage of trading using opposite FirstSun Capital and Preferred Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstSun Capital position performs unexpectedly, Preferred Bank 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 Preferred Bank will offset losses from the drop in Preferred Bank's long position.| FirstSun Capital vs. Tompkins Financial | FirstSun Capital vs. Old Second Bancorp | FirstSun Capital vs. Texas Capital Bancshares | FirstSun Capital vs. Burke Herbert Financial |
| Preferred Bank vs. Westamerica Bancorporation | Preferred Bank vs. ConnectOne Bancorp | Preferred Bank vs. QCR Holdings | Preferred Bank vs. CullenFrost Bankers |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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