Correlation Between FNB and First Bancorp

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

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

Diversification Opportunities for FNB and First Bancorp

-0.19

Correlation Coefficient

FNB  First Bancorp

Good diversification

The 3 months correlation between FNB and First is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding FNB Inc and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp and FNB 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 FNB Inc are associated (or correlated) with First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of FNB i.e., FNB and First Bancorp go up and down completely randomly.

Pair Corralation between FNB and First Bancorp

Given the investment horizon of 90 days FNB Inc is expected to under-perform the First Bancorp. But the pink sheet apears to be less risky and, when comparing its historical volatility, FNB Inc is 1.17 times less risky than First Bancorp. The pink sheet trades about -0.03 of its potential returns per unit of risk. The First Bancorp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,395  in First Bancorp on April 24, 2025 and sell it today you would earn a total of  257.00  from holding First Bancorp or generate 10.73% return on investment over 90 days.

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

FNB Inc  vs.  First Bancorp

FNB Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days FNB Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, FNB is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

First Bancorp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Bancorp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, First Bancorp may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with FNB and First Bancorp

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

The idea behind FNB Inc and First Bancorp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.