Correlation Between First Bancshares and Chesapeake Finl

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

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

Diversification Opportunities for First Bancshares and Chesapeake Finl

0.0

Correlation Coefficient

First Bancshares  Chesapeake Finl

Pay attention - limited upside

The 3 months correlation between First and Chesapeake is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Bancshares and Chesapeake Finl Shs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Finl Shs and First Bancshares 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 Bancshares are associated (or correlated) with Chesapeake Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Finl Shs has no effect on the direction of First Bancshares i.e., First Bancshares and Chesapeake Finl go up and down completely randomly.

Pair Corralation between First Bancshares and Chesapeake Finl

If you would invest  1,934  in Chesapeake Finl Shs on May 4, 2025 and sell it today you would earn a total of  266.00  from holding Chesapeake Finl Shs or generate 13.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

First Bancshares  vs.  Chesapeake Finl Shs

First Bancshares

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, First Bancshares is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Chesapeake Finl Shs

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chesapeake Finl Shs are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking signals, Chesapeake Finl reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Bancshares and Chesapeake Finl

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

The idea behind First Bancshares and Chesapeake Finl Shs 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.