Correlation Between Community Heritage and First Bankers

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

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

Diversification Opportunities for Community Heritage and First Bankers

0.14

Correlation Coefficient

Community Heritage  First Bankers

Average diversification

The 3 months correlation between Community and First is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Community Heritage Financial and First Bankers Trustshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bankers Trustshares and Community Heritage 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 Community Heritage Financial are associated (or correlated) with First Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bankers Trustshares has no effect on the direction of Community Heritage i.e., Community Heritage and First Bankers go up and down completely randomly.

Pair Corralation between Community Heritage and First Bankers

Given the investment horizon of 90 days Community Heritage Financial is expected to generate 1.43 times more return on investment than First Bankers. However, Community Heritage is 1.43 times more volatile than First Bankers Trustshares. It trades about 0.21 of its potential returns per unit of risk. First Bankers Trustshares is currently generating about 0.03 per unit of risk. If you would invest  2,445  in Community Heritage Financial on May 5, 2025 and sell it today you would earn a total of  325.00  from holding Community Heritage Financial or generate 13.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Community Heritage Financial  vs.  First Bankers Trustshares

Community Heritage

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Community Heritage Financial are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical indicators, Community Heritage may actually be approaching a critical reversion point that can send shares even higher in September 2025.

First Bankers Trustshares

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Bankers Trustshares are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, First Bankers is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Community Heritage and First Bankers

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

The idea behind Community Heritage Financial and First Bankers Trustshares 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.