Correlation Between Bank First and German American
Can any of the company-specific risk be diversified away by investing in both Bank First and German American 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 Bank First and German American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank First National and German American Bancorp, you can compare the effects of market volatilities on Bank First and German American 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 Bank First with a short position of German American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank First and German American.
Diversification Opportunities for Bank First and German American
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and German is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Bank First National and German American Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on German American Bancorp and Bank First 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 Bank First National are associated (or correlated) with German American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of German American Bancorp has no effect on the direction of Bank First i.e., Bank First and German American go up and down completely randomly.
Pair Corralation between Bank First and German American
Considering the 90-day investment horizon Bank First National is expected to generate 1.12 times more return on investment than German American. However, Bank First is 1.12 times more volatile than German American Bancorp. It trades about 0.2 of its potential returns per unit of risk. German American Bancorp is currently generating about 0.22 per unit of risk. If you would invest 9,173 in Bank First National on August 25, 2024 and sell it today you would earn a total of 1,506 from holding Bank First National or generate 16.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank First National vs. German American Bancorp
Performance |
| Timeline |
| Bank First National |
| German American Bancorp |
Bank First and German American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank First and German American
The main advantage of trading using opposite Bank First and German American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank First position performs unexpectedly, German American 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 German American will offset losses from the drop in German American's long position.| Bank First vs. Fifth Third Bancorp | Bank First vs. Zions Bancorporation | Bank First vs. Huntington Bancshares Incorporated | Bank First vs. PNC Financial Services |
| German American vs. Lakeland Financial | German American vs. Great Southern Bancorp | German American vs. First Merchants | German American vs. First Financial |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |