Correlation Between First Savings and ChoiceOne Financial

Can any of the company-specific risk be diversified away by investing in both First Savings and ChoiceOne Financial 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 ChoiceOne Financial 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 ChoiceOne Financial Services, you can compare the effects of market volatilities on First Savings and ChoiceOne Financial 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 ChoiceOne Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Savings and ChoiceOne Financial.

Diversification Opportunities for First Savings and ChoiceOne Financial

0.65

Correlation Coefficient

First Savings  ChoiceOne Financial

Poor diversification

The 3 months correlation between First and ChoiceOne is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding First Savings Financial and ChoiceOne Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChoiceOne Financial 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 ChoiceOne Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChoiceOne Financial has no effect on the direction of First Savings i.e., First Savings and ChoiceOne Financial go up and down completely randomly.

Pair Corralation between First Savings and ChoiceOne Financial

Given the investment horizon of 90 days First Savings is expected to generate 2.38 times less return on investment than ChoiceOne Financial. But when comparing it to its historical volatility, First Savings Financial is 1.03 times less risky than ChoiceOne Financial. It trades about 0.02 of its potential returns per unit of risk. ChoiceOne Financial Services is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,971  in ChoiceOne Financial Services on May 25, 2025 and sell it today you would earn a total of  120.00  from holding ChoiceOne Financial Services or generate 4.04% return on investment over 90 days.

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

First Savings Financial  vs.  ChoiceOne Financial Services

First Savings Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Savings Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, First Savings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ChoiceOne Financial

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in ChoiceOne Financial Services are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, ChoiceOne Financial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with First Savings and ChoiceOne Financial

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

The idea behind First Savings Financial and ChoiceOne Financial Services 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.