Correlation Between Bancfirst Corp and AMERICAN BANCSHARES

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Can any of the company-specific risk be diversified away by investing in both Bancfirst Corp and AMERICAN BANCSHARES 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 Bancfirst Corp and AMERICAN BANCSHARES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bancfirst Corp and AMERICAN BANCSHARES INC, you can compare the effects of market volatilities on Bancfirst Corp and AMERICAN BANCSHARES 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 Bancfirst Corp with a short position of AMERICAN BANCSHARES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancfirst Corp and AMERICAN BANCSHARES.

Diversification Opportunities for Bancfirst Corp and AMERICAN BANCSHARES

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bancfirst and AMERICAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bancfirst Corp and AMERICAN BANCSHARES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN BANCSHARES INC and Bancfirst Corp 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 Bancfirst Corp are associated (or correlated) with AMERICAN BANCSHARES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN BANCSHARES INC has no effect on the direction of Bancfirst Corp i.e., Bancfirst Corp and AMERICAN BANCSHARES go up and down completely randomly.

Pair Corralation between Bancfirst Corp and AMERICAN BANCSHARES

If you would invest  8,323  in Bancfirst Corp on April 2, 2022 and sell it today you would earn a total of  1,248  from holding Bancfirst Corp or generate 14.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.61%
ValuesDaily Returns

Bancfirst Corp  vs.  AMERICAN BANCSHARES INC

 Performance (%) 
      Timeline 
Bancfirst Corp 
Bancfirst Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bancfirst Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Bancfirst Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bancfirst Price Channel

AMERICAN BANCSHARES INC 
AMERICAN Performance
0 of 100
Over the last 90 days AMERICAN BANCSHARES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, AMERICAN BANCSHARES is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Bancfirst Corp and AMERICAN BANCSHARES Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Bancfirst Corp and AMERICAN BANCSHARES

The main advantage of trading using opposite Bancfirst Corp and AMERICAN BANCSHARES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancfirst Corp position performs unexpectedly, AMERICAN BANCSHARES 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 AMERICAN BANCSHARES will offset losses from the drop in AMERICAN BANCSHARES's long position.
The idea behind Bancfirst Corp and AMERICAN BANCSHARES INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

AMERICAN BANCSHARES INC

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against AMERICAN BANCSHARES as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. AMERICAN BANCSHARES's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, AMERICAN BANCSHARES's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to AMERICAN BANCSHARES INC.
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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