Correlation Between First Bancorp and BankUnited

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both First Bancorp and BankUnited 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 BankUnited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Bancorp and BankUnited, you can compare the effects of market volatilities on First Bancorp and BankUnited 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 BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bancorp and BankUnited.

Diversification Opportunities for First Bancorp and BankUnited

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between First and BankUnited is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding First Bancorp and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited 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 BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of First Bancorp i.e., First Bancorp and BankUnited go up and down completely randomly.

Pair Corralation between First Bancorp and BankUnited

Given the investment horizon of 90 days First Bancorp is expected to generate 0.63 times more return on investment than BankUnited. However, First Bancorp is 1.58 times less risky than BankUnited. It trades about -0.03 of its potential returns per unit of risk. BankUnited is currently generating about -0.06 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 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

First Bancorp  vs.  BankUnited

 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

BankUnited 
BankUnited Performance
0 of 100
Over the last 90 days BankUnited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in August 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0276
Payout Ratio
0.25
Forward Annual Dividend Rate
1.0
Dividend Date
2022-07-29
Ex Dividend Date
2022-07-13

BankUnited Price Channel

First Bancorp and BankUnited Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with First Bancorp and BankUnited

The main advantage of trading using opposite First Bancorp and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancorp position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.
The idea behind First Bancorp and BankUnited 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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go