Correlation Between Associated Banc and Bank First
Can any of the company-specific risk be diversified away by investing in both Associated Banc and Bank First 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 Associated Banc and Bank First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Banc Corp and Bank First National, you can compare the effects of market volatilities on Associated Banc and Bank First 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 Associated Banc with a short position of Bank First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Banc and Bank First.
Diversification Opportunities for Associated Banc and Bank First
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Associated and Bank is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Associated Banc Corp and Bank First National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank First National and Associated Banc 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 Associated Banc Corp are associated (or correlated) with Bank First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank First National has no effect on the direction of Associated Banc i.e., Associated Banc and Bank First go up and down completely randomly.
Pair Corralation between Associated Banc and Bank First
Considering the 90-day investment horizon Associated Banc Corp is expected to generate 1.14 times more return on investment than Bank First. However, Associated Banc is 1.14 times more volatile than Bank First National. It trades about 0.22 of its potential returns per unit of risk. Bank First National is currently generating about 0.18 per unit of risk. If you would invest 2,268 in Associated Banc Corp on August 25, 2024 and sell it today you would earn a total of 463.00 from holding Associated Banc Corp or generate 20.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Banc Corp vs. Bank First National
Performance |
| Timeline |
| Associated Banc Corp |
| Bank First National |
Associated Banc and Bank First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Banc and Bank First
The main advantage of trading using opposite Associated Banc and Bank First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Banc position performs unexpectedly, Bank First 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 Bank First will offset losses from the drop in Bank First's long position.| Associated Banc vs. Bank First National | Associated Banc vs. First Business Financial | Associated Banc vs. National Bank Holdings | Associated Banc vs. OFG Bancorp |
| Bank First vs. Norwood Financial Corp | Bank First vs. Chemung Financial Corp | Bank First vs. Home Federal Bancorp | Bank First vs. Rhinebeck 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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