Correlation Between Affinity Bancshares and Waterstone Financial
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and Waterstone 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 Waterstone 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 Waterstone Financial, you can compare the effects of market volatilities on Affinity Bancshares and Waterstone 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 Waterstone Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and Waterstone Financial.
Diversification Opportunities for Affinity Bancshares and Waterstone Financial
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Affinity and Waterstone is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and Waterstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waterstone 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 Waterstone Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waterstone Financial has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and Waterstone Financial go up and down completely randomly.
Pair Corralation between Affinity Bancshares and Waterstone Financial
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 0.29 times more return on investment than Waterstone Financial. However, Affinity Bancshares is 3.48 times less risky than Waterstone Financial. It trades about 0.06 of its potential returns per unit of risk. Waterstone Financial is currently generating about 0.02 per unit of risk. If you would invest 2,139 in Affinity Bancshares on August 30, 2024 and sell it today you would earn a total of 23.00 from holding Affinity Bancshares or generate 1.08% 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. Waterstone Financial
Performance |
| Timeline |
| Affinity Bancshares |
| Waterstone Financial |
Affinity Bancshares and Waterstone Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and Waterstone Financial
The main advantage of trading using opposite Affinity Bancshares and Waterstone Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, Waterstone 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 Waterstone Financial will offset losses from the drop in Waterstone 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 |
| Waterstone Financial vs. National Bank Holdings | Waterstone Financial vs. Community West Bancshares | Waterstone Financial vs. Financial Institutions | Waterstone Financial vs. Kearny Financial 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |