Correlation Between Disney and Bancfirst Corp

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

Diversification Opportunities for Disney and Bancfirst Corp

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Disney and Bancfirst is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Bancfirst Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancfirst Corp and Disney 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 Walt Disney are associated (or correlated) with Bancfirst Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancfirst Corp has no effect on the direction of Disney i.e., Disney and Bancfirst Corp go up and down completely randomly.

Pair Corralation between Disney and Bancfirst Corp

Considering the 90-day investment horizon Walt Disney is expected to under-perform the Bancfirst Corp. But the stock apears to be less risky and, when comparing its historical volatility, Walt Disney is 1.03 times less risky than Bancfirst Corp. The stock trades about -0.01 of its potential returns per unit of risk. The Bancfirst Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4,247  in Bancfirst Corp on July 9, 2022 and sell it today you would earn a total of  4,872  from holding Bancfirst Corp or generate 114.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Walt Disney  vs.  Bancfirst Corp

 Performance (%) 
       Timeline  
Walt Disney 
Disney Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Walt Disney are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal forward indicators, Disney may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Disney Price Channel

Bancfirst Corp 
Bancfirst Performance
0 of 100
Over the last 90 days Bancfirst Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Bancfirst Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bancfirst Price Channel

Disney and Bancfirst Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Disney and Bancfirst Corp

The main advantage of trading using opposite Disney and Bancfirst Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Bancfirst Corp 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 Bancfirst Corp will offset losses from the drop in Bancfirst Corp's long position.
Disney vs. Live Nation Entertainment
The idea behind Walt Disney and Bancfirst Corp 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.
Bancfirst Corp vs. Amazon 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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