Correlation Between Ames National and Ottawa Savings
Can any of the company-specific risk be diversified away by investing in both Ames National and Ottawa Savings 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 Ames National and Ottawa Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ames National and Ottawa Savings Bancorp, you can compare the effects of market volatilities on Ames National and Ottawa Savings 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 Ames National with a short position of Ottawa Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ames National and Ottawa Savings.
Diversification Opportunities for Ames National and Ottawa Savings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ames and Ottawa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ames National and Ottawa Savings Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ottawa Savings Bancorp and Ames National 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 Ames National are associated (or correlated) with Ottawa Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ottawa Savings Bancorp has no effect on the direction of Ames National i.e., Ames National and Ottawa Savings go up and down completely randomly.
Pair Corralation between Ames National and Ottawa Savings
If you would invest 1,780 in Ames National on November 28, 2024 and sell it today you would earn a total of 52.00 from holding Ames National or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ames National vs. Ottawa Savings Bancorp
Performance |
| Timeline |
| Ames National |
| Ottawa Savings Bancorp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Ames National and Ottawa Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ames National and Ottawa Savings
The main advantage of trading using opposite Ames National and Ottawa Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ames National position performs unexpectedly, Ottawa Savings 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 Ottawa Savings will offset losses from the drop in Ottawa Savings' long position.| Ames National vs. First Community | Ames National vs. Old Point Financial | Ames National vs. Oak Valley Bancorp | Ames National vs. Chemung Financial Corp |
| Ottawa Savings vs. Lake Shore Bancorp | Ottawa Savings vs. IF Bancorp | Ottawa Savings vs. Home Federal 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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