Correlation Between Banco De and Finward Bancorp
Can any of the company-specific risk be diversified away by investing in both Banco De 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 Banco De and Finward Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco De Chile and Finward Bancorp, you can compare the effects of market volatilities on Banco De 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 Banco De with a short position of Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and Finward Bancorp.
Diversification Opportunities for Banco De and Finward Bancorp
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Finward is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Banco De Chile and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp and Banco De 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 Banco De Chile 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 Banco De i.e., Banco De and Finward Bancorp go up and down completely randomly.
Pair Corralation between Banco De and Finward Bancorp
Considering the 90-day investment horizon Banco De Chile is expected to under-perform the Finward Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Banco De Chile is 1.28 times less risky than Finward Bancorp. The stock trades about -0.03 of its potential returns per unit of risk. The Finward Bancorp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,439 in Finward Bancorp on August 30, 2024 and sell it today you would earn a total of 652.00 from holding Finward Bancorp or generate 26.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco De Chile vs. Finward Bancorp
Performance |
| Timeline |
| Banco De Chile |
| Finward Bancorp |
Banco De and Finward Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and Finward Bancorp
The main advantage of trading using opposite Banco De and Finward Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De 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.| Banco De vs. Banco Santander Brasil | Banco De vs. CrossFirst Bankshares | Banco De vs. Banco Bradesco SA | Banco De vs. CF Bankshares |
| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |