Correlation Between Auburn National and Good Times
Can any of the company-specific risk be diversified away by investing in both Auburn National and Good Times 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 Good Times 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 Good Times Restaurants, you can compare the effects of market volatilities on Auburn National and Good Times 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 Good Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and Good Times.
Diversification Opportunities for Auburn National and Good Times
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Auburn and Good is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and Good Times Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Good Times Restaurants 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 Good Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Good Times Restaurants has no effect on the direction of Auburn National i.e., Auburn National and Good Times go up and down completely randomly.
Pair Corralation between Auburn National and Good Times
Given the investment horizon of 90 days Auburn National is expected to generate 1.03 times less return on investment than Good Times. But when comparing it to its historical volatility, Auburn National Bancorporation is 1.18 times less risky than Good Times. It trades about 0.04 of its potential returns per unit of risk. Good Times Restaurants is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 232.00 in Good Times Restaurants on September 14, 2024 and sell it today you would earn a total of 38.00 from holding Good Times Restaurants or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Auburn National Bancorp. vs. Good Times Restaurants
Performance |
| Timeline |
| Auburn National Banc |
| Good Times Restaurants |
Auburn National and Good Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and Good Times
The main advantage of trading using opposite Auburn National and Good Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, Good Times 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 Good Times will offset losses from the drop in Good Times' long position.| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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