Correlation Between 1st Capital and Hancock Whitney
Can any of the company-specific risk be diversified away by investing in both 1st Capital and Hancock Whitney 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 1st Capital and Hancock Whitney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1st Capital Bank and Hancock Whitney Corp, you can compare the effects of market volatilities on 1st Capital and Hancock Whitney 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 1st Capital with a short position of Hancock Whitney. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1st Capital and Hancock Whitney.
Diversification Opportunities for 1st Capital and Hancock Whitney
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 1st and Hancock is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding 1st Capital Bank and Hancock Whitney Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancock Whitney Corp and 1st 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 1st Capital Bank are associated (or correlated) with Hancock Whitney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancock Whitney Corp has no effect on the direction of 1st Capital i.e., 1st Capital and Hancock Whitney go up and down completely randomly.
Pair Corralation between 1st Capital and Hancock Whitney
Given the investment horizon of 90 days 1st Capital Bank is expected to under-perform the Hancock Whitney. But the otc stock apears to be less risky and, when comparing its historical volatility, 1st Capital Bank is 2.33 times less risky than Hancock Whitney. The otc stock trades about -0.28 of its potential returns per unit of risk. The Hancock Whitney Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,183 in Hancock Whitney Corp on January 18, 2024 and sell it today you would earn a total of 18.00 from holding Hancock Whitney Corp or generate 0.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
1st Capital Bank vs. Hancock Whitney Corp
Performance |
Timeline |
1st Capital Bank |
Hancock Whitney Corp |
1st Capital and Hancock Whitney Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 1st Capital and Hancock Whitney
The main advantage of trading using opposite 1st Capital and Hancock Whitney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1st Capital position performs unexpectedly, Hancock Whitney 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 Hancock Whitney will offset losses from the drop in Hancock Whitney's long position.1st Capital vs. Putnam Short Duration | 1st Capital vs. Royce Opportunity Fund | 1st Capital vs. C4 TherapeuticsInc | 1st Capital vs. LSI Industries |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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