Correlation Between First Resource and John Marshall

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

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

Diversification Opportunities for First Resource and John Marshall

0.35

Correlation Coefficient

First Resource  John Marshall

Weak diversification

The 3 months correlation between First and John is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding First Resource Bank and John Marshall Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Marshall Bancorp and First Resource 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 Resource Bank are associated (or correlated) with John Marshall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Marshall Bancorp has no effect on the direction of First Resource i.e., First Resource and John Marshall go up and down completely randomly.

Pair Corralation between First Resource and John Marshall

Given the investment horizon of 90 days First Resource is expected to generate 1.22 times less return on investment than John Marshall. But when comparing it to its historical volatility, First Resource Bank is 1.8 times less risky than John Marshall. It trades about 0.19 of its potential returns per unit of risk. John Marshall Bancorp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,473  in John Marshall Bancorp on July 2, 2025 and sell it today you would earn a total of  509.00  from holding John Marshall Bancorp or generate 34.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.19%
Values	Daily Returns

First Resource Bank  vs.  John Marshall Bancorp

First Resource Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Resource Bank are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, First Resource sustained solid returns over the last few months and may actually be approaching a breakup point.

John Marshall Bancorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in John Marshall Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, John Marshall 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 Resource and John Marshall

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

The idea behind First Resource Bank and John Marshall 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.