Correlation Between First Mid and CrossFirst Bankshares

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

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

Diversification Opportunities for First Mid and CrossFirst Bankshares

-0.06

Correlation Coefficient

First Mid  CrossFirst Bankshares

Good diversification

The 3 months correlation between First and CrossFirst is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding First Mid Illinois and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares and First Mid 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 Mid Illinois are associated (or correlated) with CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of First Mid i.e., First Mid and CrossFirst Bankshares go up and down completely randomly.

Pair Corralation between First Mid and CrossFirst Bankshares

If you would invest  3,709  in First Mid Illinois on May 12, 2025 and sell it today you would earn a total of  19.00  from holding First Mid Illinois or generate 0.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

First Mid Illinois  vs.  CrossFirst Bankshares

First Mid Illinois

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Mid Illinois are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, First Mid is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

CrossFirst Bankshares

Risk-Adjusted Performance

Weakest

Over the last 90 days CrossFirst Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, CrossFirst Bankshares is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Mid and CrossFirst Bankshares

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

The idea behind First Mid Illinois and CrossFirst Bankshares 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.