Correlation Between Bank of Botetourt and FFD Financial
Can any of the company-specific risk be diversified away by investing in both Bank of Botetourt and FFD Financial 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 of Botetourt and FFD Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Botetourt and FFD Financial Corp, you can compare the effects of market volatilities on Bank of Botetourt and FFD Financial 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 of Botetourt with a short position of FFD Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Botetourt and FFD Financial.
Diversification Opportunities for Bank of Botetourt and FFD Financial
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and FFD is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Botetourt and FFD Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FFD Financial Corp and Bank of Botetourt 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 of Botetourt are associated (or correlated) with FFD Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FFD Financial Corp has no effect on the direction of Bank of Botetourt i.e., Bank of Botetourt and FFD Financial go up and down completely randomly.
Pair Corralation between Bank of Botetourt and FFD Financial
If you would invest 3,120 in Bank of Botetourt on October 22, 2024 and sell it today you would earn a total of 102.00 from holding Bank of Botetourt or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.64% |
| Values | Daily Returns |
Bank of Botetourt vs. FFD Financial Corp
Performance |
| Timeline |
| Bank of Botetourt |
| FFD Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of Botetourt and FFD Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Botetourt and FFD Financial
The main advantage of trading using opposite Bank of Botetourt and FFD Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Botetourt position performs unexpectedly, FFD Financial 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 FFD Financial will offset losses from the drop in FFD Financial's long position.| Bank of Botetourt vs. Century Financial Corp | Bank of Botetourt vs. FS Bancorp | Bank of Botetourt vs. Lyons Bancorp | Bank of Botetourt vs. Solvay Bank Corp |
| FFD Financial vs. First Bancorp | FFD Financial vs. Triumph Financial | FFD Financial vs. Northeast Bancorp | FFD Financial vs. Greene County 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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