Correlation Between Esquire Financial and First Capital

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

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

Diversification Opportunities for Esquire Financial and First Capital

-0.74

Correlation Coefficient

Esquire Financial  First Capital

Pay attention - limited upside

The 3 months correlation between Esquire and First is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Esquire Financial Holdings and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital and Esquire Financial 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 Esquire Financial Holdings are associated (or correlated) with First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of Esquire Financial i.e., Esquire Financial and First Capital go up and down completely randomly.

Pair Corralation between Esquire Financial and First Capital

Considering the 90-day investment horizon Esquire Financial Holdings is expected to generate 0.54 times more return on investment than First Capital. However, Esquire Financial Holdings is 1.84 times less risky than First Capital. It trades about 0.22 of its potential returns per unit of risk. First Capital is currently generating about -0.1 per unit of risk. If you would invest  8,477  in Esquire Financial Holdings on April 24, 2025 and sell it today you would earn a total of  1,900  from holding Esquire Financial Holdings or generate 22.41% return on investment over 90 days.

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

Esquire Financial Holdings  vs.  First Capital

Esquire Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Esquire Financial Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Esquire Financial reported solid returns over the last few months and may actually be approaching a breakup point.

First Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Esquire Financial and First Capital

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

The idea behind Esquire Financial Holdings and First Capital 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.