Correlation Between Auburn National and IF Bancorp
Can any of the company-specific risk be diversified away by investing in both Auburn National and IF Bancorp 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 IF Bancorp 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 IF Bancorp, you can compare the effects of market volatilities on Auburn National and IF Bancorp 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 IF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and IF Bancorp.
Diversification Opportunities for Auburn National and IF Bancorp
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auburn and IROQ is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and IF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IF Bancorp 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 IF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IF Bancorp has no effect on the direction of Auburn National i.e., Auburn National and IF Bancorp go up and down completely randomly.
Pair Corralation between Auburn National and IF Bancorp
Given the investment horizon of 90 days Auburn National Bancorporation is expected to generate 0.7 times more return on investment than IF Bancorp. However, Auburn National Bancorporation is 1.43 times less risky than IF Bancorp. It trades about 0.14 of its potential returns per unit of risk. IF Bancorp is currently generating about 0.07 per unit of risk. If you would invest 2,188 in Auburn National Bancorporation on September 3, 2024 and sell it today you would earn a total of 112.00 from holding Auburn National Bancorporation or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auburn National Bancorp. vs. IF Bancorp
Performance |
| Timeline |
| Auburn National Banc |
| IF Bancorp |
Auburn National and IF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and IF Bancorp
The main advantage of trading using opposite Auburn National and IF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, IF Bancorp 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 IF Bancorp will offset losses from the drop in IF Bancorp's long position.| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California Bancorp |
| IF Bancorp vs. Home Bancorp | IF Bancorp vs. Commerzbank AG PK | IF Bancorp vs. ConnectOne Bancorp | IF Bancorp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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