Correlation Between First Savings and Credicorp

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

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

Diversification Opportunities for First Savings and Credicorp

-0.54

Correlation Coefficient

First Savings  Credicorp

Excellent diversification

The 3 months correlation between First and Credicorp is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding First Savings Financial and Credicorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credicorp and First Savings 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 Savings Financial are associated (or correlated) with Credicorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credicorp has no effect on the direction of First Savings i.e., First Savings and Credicorp go up and down completely randomly.

Pair Corralation between First Savings and Credicorp

Given the investment horizon of 90 days First Savings Financial is expected to under-perform the Credicorp. In addition to that, First Savings is 1.21 times more volatile than Credicorp. It trades about -0.09 of its total potential returns per unit of risk. Credicorp is currently generating about 0.4 per unit of volatility. If you would invest  19,258  in Credicorp on May 10, 2025 and sell it today you would earn a total of  5,662  from holding Credicorp or generate 29.4% return on investment over 90 days.

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

First Savings Financial  vs.  Credicorp

First Savings Financial

Risk-Adjusted Performance

Weakest

Over the last 90 days First Savings Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Credicorp

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Credicorp are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Credicorp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Savings and Credicorp

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

The idea behind First Savings Financial and Credicorp 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.