Correlation Between Affinity Bancshares and Provident Financial
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and Provident 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 Provident 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 Provident Financial Services, you can compare the effects of market volatilities on Affinity Bancshares and Provident 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 Provident Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and Provident Financial.
Diversification Opportunities for Affinity Bancshares and Provident Financial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Affinity and Provident is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and Provident Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provident Financial 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 Provident Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provident Financial has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and Provident Financial go up and down completely randomly.
Pair Corralation between Affinity Bancshares and Provident Financial
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 25.81 times less return on investment than Provident Financial. But when comparing it to its historical volatility, Affinity Bancshares is 4.37 times less risky than Provident Financial. It trades about 0.03 of its potential returns per unit of risk. Provident Financial Services is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,882 in Provident Financial Services on August 31, 2024 and sell it today you would earn a total of 251.00 from holding Provident Financial Services or generate 13.34% 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. Provident Financial Services
Performance |
| Timeline |
| Affinity Bancshares |
| Provident Financial |
Affinity Bancshares and Provident Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and Provident Financial
The main advantage of trading using opposite Affinity Bancshares and Provident Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, Provident 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 Provident Financial will offset losses from the drop in Provident Financial's long position.| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares vs. Community West Bancshares |
| Provident Financial vs. First Mid Illinois | Provident Financial vs. ConnectOne Bancorp | Provident Financial vs. Finward Bancorp | Provident Financial vs. CrossFirst Bankshares |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |