Correlation Between First Financial and Inter Co

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

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

Diversification Opportunities for First Financial and Inter Co

-0.23

Correlation Coefficient

First Financial  Inter Co

Very good diversification

The 3 months correlation between First and Inter is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding First Financial Bankshares and Inter Co Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Co Class and First 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 First Financial Bankshares are associated (or correlated) with Inter Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Co Class has no effect on the direction of First Financial i.e., First Financial and Inter Co go up and down completely randomly.

Pair Corralation between First Financial and Inter Co

Given the investment horizon of 90 days First Financial Bankshares is expected to under-perform the Inter Co. But the stock apears to be less risky and, when comparing its historical volatility, First Financial Bankshares is 1.73 times less risky than Inter Co. The stock trades about -0.13 of its potential returns per unit of risk. The Inter Co Class is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  876.00  in Inter Co Class on September 9, 2025 and sell it today you would lose (51.00) from holding Inter Co Class or give up 5.82% of portfolio value over 90 days.

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

First Financial Bankshares  vs.  Inter Co Class

First Financial Bank

Risk-Adjusted Performance

Weakest

Over the last 90 days First Financial Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in January 2026. The recent disarray may also be a sign of long period up-swing for the firm investors.

Inter Co Class

Risk-Adjusted Performance

Weakest

Over the last 90 days Inter Co Class has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Inter Co is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with First Financial and Inter Co

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

The idea behind First Financial Bankshares and Inter Co Class 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.