Correlation Between Affinity Bancshares and SB Financial
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and SB 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 SB 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 SB Financial Group, you can compare the effects of market volatilities on Affinity Bancshares and SB 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 SB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and SB Financial.
Diversification Opportunities for Affinity Bancshares and SB Financial
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Affinity and SBFG is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and SB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SB Financial Group 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 SB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SB Financial Group has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and SB Financial go up and down completely randomly.
Pair Corralation between Affinity Bancshares and SB Financial
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 10.26 times less return on investment than SB Financial. But when comparing it to its historical volatility, Affinity Bancshares is 3.65 times less risky than SB Financial. It trades about 0.06 of its potential returns per unit of risk. SB Financial Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,954 in SB Financial Group on August 30, 2024 and sell it today you would earn a total of 221.00 from holding SB Financial Group or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affinity Bancshares vs. SB Financial Group
Performance |
| Timeline |
| Affinity Bancshares |
| SB Financial Group |
Affinity Bancshares and SB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and SB Financial
The main advantage of trading using opposite Affinity Bancshares and SB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, SB 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 SB Financial will offset losses from the drop in SB Financial's long position.| Affinity Bancshares vs. SVB T Corp | Affinity Bancshares vs. First Capital | Affinity Bancshares vs. Pioneer Bankcorp | Affinity Bancshares vs. Liberty Northwest Bancorp |
| SB Financial vs. Home Federal Bancorp | SB Financial vs. Lake Shore Bancorp | SB Financial vs. National Bankshares | SB Financial vs. Sound Financial 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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