Correlation Between First Bancorp and Bar Harbor

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

Diversification Opportunities for First Bancorp and Bar Harbor

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between First and Bar Harbor is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding First Bancorp and Bar Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bar Harbor Bankshares and First Bancorp 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 Bancorp are associated (or correlated) with Bar Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bar Harbor Bankshares has no effect on the direction of First Bancorp i.e., First Bancorp and Bar Harbor go up and down completely randomly.

Pair Corralation between First Bancorp and Bar Harbor

Given the investment horizon of 90 days First Bancorp is expected to generate 0.74 times more return on investment than Bar Harbor. However, First Bancorp is 1.35 times less risky than Bar Harbor. It trades about -0.03 of its potential returns per unit of risk. Bar Harbor Bankshares is currently generating about -0.02 per unit of risk. If you would invest  3,214  in First Bancorp on April 4, 2022 and sell it today you would lose (183.00)  from holding First Bancorp or give up 5.69% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

First Bancorp  vs.  Bar Harbor Bankshares

 Performance (%) 
      Timeline 
First Bancorp 
First Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in First Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, First Bancorp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0422
Payout Ratio
0.38
Last Split Factor
3:1
Forward Annual Dividend Rate
1.28
Dividend Date
2022-04-22
Ex Dividend Date
2022-04-08
Last Split Date
2004-06-02

First Price Channel

Bar Harbor Bankshares 
Bar Harbor Performance
0 of 100
Over the last 90 days Bar Harbor Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, Bar Harbor is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0393
Payout Ratio
0.37
Last Split Factor
3:2
Forward Annual Dividend Rate
1.04
Dividend Date
2022-06-17
Ex Dividend Date
2022-05-16
Last Split Date
2017-03-22

Bar Harbor Price Channel

First Bancorp and Bar Harbor Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with First Bancorp and Bar Harbor

The main advantage of trading using opposite First Bancorp and Bar Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancorp position performs unexpectedly, Bar Harbor 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 Bar Harbor will offset losses from the drop in Bar Harbor's long position.
The idea behind First Bancorp and Bar Harbor Bankshares 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.
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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