Correlation Between Affinity Bancshares and Primis Financial
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and Primis Financial 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 Primis Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity Bancshares and Primis Financial Corp, you can compare the effects of market volatilities on Affinity Bancshares and Primis Financial 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 Primis Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and Primis Financial.
Diversification Opportunities for Affinity Bancshares and Primis Financial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Affinity and Primis is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and Primis Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primis Financial Corp 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 Primis Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primis Financial Corp has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and Primis Financial go up and down completely randomly.
Pair Corralation between Affinity Bancshares and Primis Financial
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 0.42 times more return on investment than Primis Financial. However, Affinity Bancshares is 2.4 times less risky than Primis Financial. It trades about 0.22 of its potential returns per unit of risk. Primis Financial Corp is currently generating about -0.04 per unit of risk. If you would invest 1,755 in Affinity Bancshares on November 3, 2024 and sell it today you would earn a total of 85.00 from holding Affinity Bancshares or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affinity Bancshares vs. Primis Financial Corp
Performance |
| Timeline |
| Affinity Bancshares |
| Primis Financial Corp |
Affinity Bancshares and Primis Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and Primis Financial
The main advantage of trading using opposite Affinity Bancshares and Primis Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, Primis Financial 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 Primis Financial will offset losses from the drop in Primis Financial's long position.| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares vs. Community West Bancshares |
| Primis Financial vs. Affinity Bancshares | Primis Financial vs. Home Federal Bancorp | Primis Financial vs. Community West Bancshares | Primis Financial vs. Investar Holding 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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