Correlation Between First Reliance and First Bancorp

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

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

Diversification Opportunities for First Reliance and First Bancorp

0.18

Correlation Coefficient

First Reliance  First Bancorp

Average diversification

The 3 months correlation between First and First is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding First Reliance Bancshares and First Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp and First Reliance 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 Reliance Bancshares 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 First Reliance i.e., First Reliance and First Bancorp go up and down completely randomly.

Pair Corralation between First Reliance and First Bancorp

Given the investment horizon of 90 days First Reliance Bancshares is expected to generate 0.76 times more return on investment than First Bancorp. However, First Reliance Bancshares is 1.32 times less risky than First Bancorp. It trades about 0.09 of its potential returns per unit of risk. First Bancorp of is currently generating about -0.03 per unit of risk. If you would invest  935.00  in First Reliance Bancshares on April 28, 2025 and sell it today you would earn a total of  65.00  from holding First Reliance Bancshares or generate 6.95% return on investment over 90 days.

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

First Reliance Bancshares  vs.  First Bancorp of

First Reliance Bancshares

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Reliance Bancshares are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, First Reliance may actually be approaching a critical reversion point that can send shares even higher in August 2025.

First Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Bancorp of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, First Bancorp is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with First Reliance and First Bancorp

The main advantage of trading using opposite First Reliance and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Reliance 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 First Reliance Bancshares and First Bancorp of 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.