Correlation Between First Bancorp and Howard Bancorp

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

Diversification Opportunities for First Bancorp and Howard Bancorp

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between First and Howard is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding First Bancorp and Howard Bancorp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Howard Bancorp 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 Howard Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Howard Bancorp has no effect on the direction of First Bancorp i.e., First Bancorp and Howard Bancorp go up and down completely randomly.

Pair Corralation between First Bancorp and Howard Bancorp

Given the investment horizon of 90 days First Bancorp is expected to generate 2.27 times less return on investment than Howard Bancorp. But when comparing it to its historical volatility, First Bancorp is 1.43 times less risky than Howard Bancorp. It trades about 0.06 of its potential returns per unit of risk. Howard Bancorp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  962.00  in Howard Bancorp on April 4, 2022 and sell it today you would earn a total of  1,368  from holding Howard Bancorp or generate 142.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy77.96%
ValuesDaily Returns

First Bancorp  vs.  Howard Bancorp Inc

 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 new 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

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

First Bancorp and Howard Bancorp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with First Bancorp and Howard Bancorp

The main advantage of trading using opposite First Bancorp and Howard Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bancorp position performs unexpectedly, Howard Bancorp 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 Howard Bancorp will offset losses from the drop in Howard Bancorp's long position.
The idea behind First Bancorp and Howard Bancorp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

Other Complementary Tools

Shere Portfolio
Track or share privately all of your investments from the convenience of any device
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go