Correlation Between Auburn National and Independent Bank
Can any of the company-specific risk be diversified away by investing in both Auburn National and Independent 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 Independent 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 Independent Bank Group, you can compare the effects of market volatilities on Auburn National and Independent 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 Independent Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and Independent Bank.
Diversification Opportunities for Auburn National and Independent Bank
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Auburn and Independent is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and Independent Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independent 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 Independent Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independent Bank has no effect on the direction of Auburn National i.e., Auburn National and Independent Bank go up and down completely randomly.
Pair Corralation between Auburn National and Independent Bank
Given the investment horizon of 90 days Auburn National is expected to generate 2.46 times less return on investment than Independent Bank. But when comparing it to its historical volatility, Auburn National Bancorporation is 2.26 times less risky than Independent Bank. It trades about 0.18 of its potential returns per unit of risk. Independent Bank Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 5,866 in Independent Bank Group on August 28, 2024 and sell it today you would earn a total of 865.00 from holding Independent Bank Group or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auburn National Bancorp. vs. Independent Bank Group
Performance |
| Timeline |
| Auburn National Banc |
| Independent Bank |
Auburn National and Independent Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and Independent Bank
The main advantage of trading using opposite Auburn National and Independent Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, Independent 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 Independent Bank will offset losses from the drop in Independent 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 |
| Independent Bank vs. Heritage Financial | Independent Bank vs. ConnectOne Bancorp | Independent Bank vs. Home Bancorp | Independent Bank vs. National Bank Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |