Correlation Between BancFirst and Finward Bancorp
Can any of the company-specific risk be diversified away by investing in both BancFirst and Finward 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 BancFirst and Finward Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BancFirst and Finward Bancorp, you can compare the effects of market volatilities on BancFirst and Finward 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 BancFirst with a short position of Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BancFirst and Finward Bancorp.
Diversification Opportunities for BancFirst and Finward Bancorp
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BancFirst and Finward is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding BancFirst and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp and BancFirst 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 BancFirst are associated (or correlated) with Finward Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finward Bancorp has no effect on the direction of BancFirst i.e., BancFirst and Finward Bancorp go up and down completely randomly.
Pair Corralation between BancFirst and Finward Bancorp
Given the investment horizon of 90 days BancFirst is expected to generate 1.03 times more return on investment than Finward Bancorp. However, BancFirst is 1.03 times more volatile than Finward Bancorp. It trades about 0.06 of its potential returns per unit of risk. Finward Bancorp is currently generating about 0.06 per unit of risk. If you would invest 8,978 in BancFirst on August 28, 2024 and sell it today you would earn a total of 3,831 from holding BancFirst or generate 42.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
BancFirst vs. Finward Bancorp
Performance |
| Timeline |
| BancFirst |
| Finward Bancorp |
BancFirst and Finward Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BancFirst and Finward Bancorp
The main advantage of trading using opposite BancFirst and Finward Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BancFirst position performs unexpectedly, Finward 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 Finward Bancorp will offset losses from the drop in Finward Bancorp's long position.| BancFirst vs. Glacier Bancorp | BancFirst vs. BOK Financial | BancFirst vs. First Financial Bancorp | BancFirst vs. First Bancorp |
| Finward Bancorp vs. Fifth Third Bancorp | Finward Bancorp vs. Huntington Bancshares Incorporated | Finward Bancorp vs. MT Bank |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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