Correlation Between Affinity Bancshares and Finward Bancorp
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and Finward 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 Affinity Bancshares and Finward Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity Bancshares and Finward Bancorp, you can compare the effects of market volatilities on Affinity Bancshares and Finward 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 Affinity Bancshares with a short position of Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and Finward Bancorp.
Diversification Opportunities for Affinity Bancshares and Finward Bancorp
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Affinity and Finward is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp 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 Finward Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finward Bancorp has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and Finward Bancorp go up and down completely randomly.
Pair Corralation between Affinity Bancshares and Finward Bancorp
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 1.38 times more return on investment than Finward Bancorp. However, Affinity Bancshares is 1.38 times more volatile than Finward Bancorp. It trades about 0.1 of its potential returns per unit of risk. Finward Bancorp is currently generating about 0.14 per unit of risk. If you would invest 1,412 in Affinity Bancshares on August 24, 2024 and sell it today you would earn a total of 734.00 from holding Affinity Bancshares or generate 51.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Affinity Bancshares vs. Finward Bancorp
Performance |
| Timeline |
| Affinity Bancshares |
| Finward Bancorp |
Affinity Bancshares and Finward Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and Finward Bancorp
The main advantage of trading using opposite Affinity Bancshares and Finward Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, Finward 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 Finward Bancorp will offset losses from the drop in Finward Bancorp's long position.| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares vs. Community West Bancshares |
| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward Bancorp vs. Home Federal Bancorp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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