Correlation Between Auburn National and Portillos
Can any of the company-specific risk be diversified away by investing in both Auburn National and Portillos 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 Portillos 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 Portillos, you can compare the effects of market volatilities on Auburn National and Portillos 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 Portillos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and Portillos.
Diversification Opportunities for Auburn National and Portillos
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Auburn and Portillos is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and Portillos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portillos 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 Portillos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portillos has no effect on the direction of Auburn National i.e., Auburn National and Portillos go up and down completely randomly.
Pair Corralation between Auburn National and Portillos
Given the investment horizon of 90 days Auburn National Bancorporation is expected to generate 0.77 times more return on investment than Portillos. However, Auburn National Bancorporation is 1.3 times less risky than Portillos. It trades about 0.04 of its potential returns per unit of risk. Portillos is currently generating about -0.06 per unit of risk. If you would invest 1,941 in Auburn National Bancorporation on September 14, 2024 and sell it today you would earn a total of 359.00 from holding Auburn National Bancorporation or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Auburn National Bancorp. vs. Portillos
Performance |
| Timeline |
| Auburn National Banc |
| Portillos |
Auburn National and Portillos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and Portillos
The main advantage of trading using opposite Auburn National and Portillos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, Portillos 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 Portillos will offset losses from the drop in Portillos' 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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