Correlation Between Equity Commonwealth and First CommunityPFD

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

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

Diversification Opportunities for Equity Commonwealth and First CommunityPFD

-0.59

Correlation Coefficient

Equity Commonwealth  First CommunityPFD

Excellent diversification

The 3 months correlation between Equity and First is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Equity Commonwealth and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First CommunityPFD and Equity Commonwealth 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 Equity Commonwealth are associated (or correlated) with First CommunityPFD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First CommunityPFD has no effect on the direction of Equity Commonwealth i.e., Equity Commonwealth and First CommunityPFD go up and down completely randomly.

Pair Corralation between Equity Commonwealth and First CommunityPFD

If you would invest  1,206  in First Community on July 5, 2025 and sell it today you would earn a total of  79.00  from holding First Community or generate 6.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Equity Commonwealth  vs.  First Community

Equity Commonwealth

Risk-Adjusted Performance

Weakest

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

First CommunityPFD

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in First Community are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, First CommunityPFD may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Equity Commonwealth and First CommunityPFD

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

The idea behind Equity Commonwealth and First Community 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.