Correlation Between Affinity Bancshares and John Marshall
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and John Marshall 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 John Marshall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity Bancshares and John Marshall Bancorp, you can compare the effects of market volatilities on Affinity Bancshares and John Marshall 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 John Marshall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and John Marshall.
Diversification Opportunities for Affinity Bancshares and John Marshall
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Affinity and John is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and John Marshall Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Marshall 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 John Marshall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Marshall Bancorp has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and John Marshall go up and down completely randomly.
Pair Corralation between Affinity Bancshares and John Marshall
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 5.63 times less return on investment than John Marshall. But when comparing it to its historical volatility, Affinity Bancshares is 4.68 times less risky than John Marshall. It trades about 0.08 of its potential returns per unit of risk. John Marshall Bancorp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,134 in John Marshall Bancorp on September 1, 2024 and sell it today you would earn a total of 131.00 from holding John Marshall Bancorp or generate 6.14% 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. John Marshall Bancorp
Performance |
| Timeline |
| Affinity Bancshares |
| John Marshall Bancorp |
Affinity Bancshares and John Marshall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and John Marshall
The main advantage of trading using opposite Affinity Bancshares and John Marshall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, John Marshall 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 John Marshall will offset losses from the drop in John Marshall's long position.| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares vs. Community West Bancshares |
| John Marshall vs. Home Federal Bancorp | John Marshall vs. Magyar Bancorp | John Marshall vs. ChoiceOne Financial Services | John Marshall vs. Affinity Bancshares |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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