Correlation Between Auburn National and Amalgamated Bank
Can any of the company-specific risk be diversified away by investing in both Auburn National and Amalgamated Bank 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 Auburn National and Amalgamated Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auburn National Bancorporation and Amalgamated Bank, you can compare the effects of market volatilities on Auburn National and Amalgamated Bank 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 Auburn National with a short position of Amalgamated Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and Amalgamated Bank.
Diversification Opportunities for Auburn National and Amalgamated Bank
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Auburn and Amalgamated is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and Amalgamated Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amalgamated Bank and Auburn 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 Auburn National Bancorporation are associated (or correlated) with Amalgamated Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amalgamated Bank has no effect on the direction of Auburn National i.e., Auburn National and Amalgamated Bank go up and down completely randomly.
Pair Corralation between Auburn National and Amalgamated Bank
Given the investment horizon of 90 days Auburn National is expected to generate 5.25 times less return on investment than Amalgamated Bank. But when comparing it to its historical volatility, Auburn National Bancorporation is 1.06 times less risky than Amalgamated Bank. It trades about 0.01 of its potential returns per unit of risk. Amalgamated Bank is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,234 in Amalgamated Bank on September 3, 2024 and sell it today you would earn a total of 1,329 from holding Amalgamated Bank or generate 59.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.32% |
| Values | Daily Returns |
Auburn National Bancorp. vs. Amalgamated Bank
Performance |
| Timeline |
| Auburn National Banc |
| Amalgamated Bank |
Auburn National and Amalgamated Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and Amalgamated Bank
The main advantage of trading using opposite Auburn National and Amalgamated Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, Amalgamated Bank 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 Amalgamated Bank will offset losses from the drop in Amalgamated Bank's long position.| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California Bancorp |
| Amalgamated Bank vs. Home Bancorp | Amalgamated Bank vs. Community West Bancshares | Amalgamated Bank vs. First Community | Amalgamated Bank vs. Great Southern 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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