Correlation Between Amalgamated Bank and First Bank

Can any of the company-specific risk be diversified away by investing in both Amalgamated Bank and First Bank 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 Amalgamated Bank and First Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amalgamated Bank and First Bank, you can compare the effects of market volatilities on Amalgamated Bank and First Bank 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 Amalgamated Bank with a short position of First Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amalgamated Bank and First Bank.

Diversification Opportunities for Amalgamated Bank and First Bank

-0.17

Correlation Coefficient

Amalgamated Bank  First Bank

Good diversification

The 3 months correlation between Amalgamated and First is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Amalgamated Bank and First Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bank and Amalgamated Bank 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 Amalgamated Bank are associated (or correlated) with First Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bank has no effect on the direction of Amalgamated Bank i.e., Amalgamated Bank and First Bank go up and down completely randomly.

Pair Corralation between Amalgamated Bank and First Bank

Given the investment horizon of 90 days Amalgamated Bank is expected to under-perform the First Bank. In addition to that, Amalgamated Bank is 1.31 times more volatile than First Bank. It trades about -0.17 of its total potential returns per unit of risk. First Bank is currently generating about -0.03 per unit of volatility. If you would invest  1,593  in First Bank on July 12, 2025 and sell it today you would lose (48.00) from holding First Bank or give up 3.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Amalgamated Bank  vs.  First Bank

Amalgamated Bank

Risk-Adjusted Performance

Weakest

Over the last 90 days Amalgamated Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in November 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

First Bank

Risk-Adjusted Performance

Weakest

Over the last 90 days First Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, First Bank is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amalgamated Bank and First Bank

The main advantage of trading using opposite Amalgamated Bank and First Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amalgamated Bank position performs unexpectedly, First Bank 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 First Bank will offset losses from the drop in First Bank's long position.

The idea behind Amalgamated Bank and First Bank 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.

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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 the Commodity Directory module to find actively traded commodities issued by global exchanges.