Correlation Between FirstSun Capital and First Business

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

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

Diversification Opportunities for FirstSun Capital and First Business

-0.11

Correlation Coefficient

FirstSun Capital  First Business

Good diversification

The 3 months correlation between FirstSun and First is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding FirstSun Capital Bancorp and First Business Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Business Financial and FirstSun Capital 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 FirstSun Capital Bancorp are associated (or correlated) with First Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Business Financial has no effect on the direction of FirstSun Capital i.e., FirstSun Capital and First Business go up and down completely randomly.

Pair Corralation between FirstSun Capital and First Business

Given the investment horizon of 90 days FirstSun Capital Bancorp is expected to under-perform the First Business. In addition to that, FirstSun Capital is 1.92 times more volatile than First Business Financial. It trades about -0.05 of its total potential returns per unit of risk. First Business Financial is currently generating about -0.01 per unit of volatility. If you would invest  5,176  in First Business Financial on August 26, 2025 and sell it today you would lose (71.00) from holding First Business Financial or give up 1.37% of portfolio value over 90 days.

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

FirstSun Capital Bancorp  vs.  First Business Financial

FirstSun Capital Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days FirstSun Capital Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

First Business Financial

Risk-Adjusted Performance

Weakest

Over the last 90 days First Business Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, First Business is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FirstSun Capital and First Business

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

The idea behind FirstSun Capital Bancorp and First Business Financial 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 Transaction History module to view history of all your transactions and understand their impact on performance.