Correlation Between Affinity Bancshares and Farmers Bank
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and Farmers Bank 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 Affinity Bancshares and Farmers Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity Bancshares and The Farmers Bank, you can compare the effects of market volatilities on Affinity Bancshares and Farmers Bank 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 Affinity Bancshares with a short position of Farmers Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and Farmers Bank.
Diversification Opportunities for Affinity Bancshares and Farmers Bank
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Affinity and Farmers is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and The Farmers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Bank and Affinity Bancshares 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 Affinity Bancshares are associated (or correlated) with Farmers Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Bank has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and Farmers Bank go up and down completely randomly.
Pair Corralation between Affinity Bancshares and Farmers Bank
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 0.91 times more return on investment than Farmers Bank. However, Affinity Bancshares is 1.1 times less risky than Farmers Bank. It trades about 0.08 of its potential returns per unit of risk. The Farmers Bank is currently generating about -0.07 per unit of risk. If you would invest 2,140 in Affinity Bancshares on September 3, 2024 and sell it today you would earn a total of 27.00 from holding Affinity Bancshares or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affinity Bancshares vs. The Farmers Bank
Performance |
| Timeline |
| Affinity Bancshares |
| Farmers Bank |
Affinity Bancshares and Farmers Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and Farmers Bank
The main advantage of trading using opposite Affinity Bancshares and Farmers Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, Farmers Bank 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 Farmers Bank will offset losses from the drop in Farmers Bank's long position.| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares vs. Community West Bancshares |
| Farmers Bank vs. CIB Marine Bancshares | Farmers Bank vs. F M Bank | Farmers Bank vs. ENB Financial Corp | Farmers Bank vs. First Bankers Trustshares |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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