Correlation Between Affinity Bancshares and LINKBANCORP
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and LINKBANCORP 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 LINKBANCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity Bancshares and LINKBANCORP, you can compare the effects of market volatilities on Affinity Bancshares and LINKBANCORP 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 LINKBANCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and LINKBANCORP.
Diversification Opportunities for Affinity Bancshares and LINKBANCORP
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Affinity and LINKBANCORP is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP 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 LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and LINKBANCORP go up and down completely randomly.
Pair Corralation between Affinity Bancshares and LINKBANCORP
Given the investment horizon of 90 days Affinity Bancshares is expected to under-perform the LINKBANCORP. In addition to that, Affinity Bancshares is 1.07 times more volatile than LINKBANCORP. It trades about -0.06 of its total potential returns per unit of risk. LINKBANCORP is currently generating about 0.09 per unit of volatility. If you would invest 608.00 in LINKBANCORP on November 2, 2024 and sell it today you would earn a total of 104.00 from holding LINKBANCORP or generate 17.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affinity Bancshares vs. LINKBANCORP
Performance |
| Timeline |
| Affinity Bancshares |
| LINKBANCORP |
Affinity Bancshares and LINKBANCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and LINKBANCORP
The main advantage of trading using opposite Affinity Bancshares and LINKBANCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, LINKBANCORP 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 LINKBANCORP will offset losses from the drop in LINKBANCORP's long position.| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares vs. Community West Bancshares |
| LINKBANCORP vs. Home Federal Bancorp | LINKBANCORP vs. Lake Shore Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP vs. Magyar 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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