Correlation Between Auburn Bancorp and First National
Can any of the company-specific risk be diversified away by investing in both Auburn Bancorp and First National 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 Auburn Bancorp and First National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auburn Bancorp and First National Bank, you can compare the effects of market volatilities on Auburn Bancorp and First National 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 Auburn Bancorp with a short position of First National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn Bancorp and First National.
Diversification Opportunities for Auburn Bancorp and First National
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Auburn and First is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Auburn Bancorp and First National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Bank and Auburn Bancorp 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 Auburn Bancorp are associated (or correlated) with First National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Bank has no effect on the direction of Auburn Bancorp i.e., Auburn Bancorp and First National go up and down completely randomly.
Pair Corralation between Auburn Bancorp and First National
Given the investment horizon of 90 days Auburn Bancorp is expected to generate 1.31 times more return on investment than First National. However, Auburn Bancorp is 1.31 times more volatile than First National Bank. It trades about 0.04 of its potential returns per unit of risk. First National Bank is currently generating about 0.03 per unit of risk. If you would invest 835.00 in Auburn Bancorp on September 14, 2024 and sell it today you would earn a total of 14.00 from holding Auburn Bancorp or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auburn Bancorp vs. First National Bank
Performance |
| Timeline |
| Auburn Bancorp |
| First National Bank |
Auburn Bancorp and First National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn Bancorp and First National
The main advantage of trading using opposite Auburn Bancorp and First National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn Bancorp position performs unexpectedly, First National 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 National will offset losses from the drop in First National's long position.| Auburn Bancorp vs. Freedom Bank of | Auburn Bancorp vs. HUMANA INC | Auburn Bancorp vs. Barloworld Ltd ADR | Auburn Bancorp vs. Morningstar Unconstrained Allocation |
| First National vs. IF Bancorp | First National vs. LINKBANCORP | First National vs. Pathfinder Bancorp | First National vs. First Keystone Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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