Correlation Between Cambridge Bancorp and CrossFirst Bankshares
Can any of the company-specific risk be diversified away by investing in both Cambridge Bancorp and CrossFirst Bankshares 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 Cambridge Bancorp and CrossFirst Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambridge Bancorp and CrossFirst Bankshares, you can compare the effects of market volatilities on Cambridge Bancorp and CrossFirst Bankshares 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 Cambridge Bancorp with a short position of CrossFirst Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambridge Bancorp and CrossFirst Bankshares.
Diversification Opportunities for Cambridge Bancorp and CrossFirst Bankshares
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cambridge and CrossFirst is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cambridge Bancorp and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares and Cambridge Bancorp 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 Cambridge Bancorp are associated (or correlated) with CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of Cambridge Bancorp i.e., Cambridge Bancorp and CrossFirst Bankshares go up and down completely randomly.
Pair Corralation between Cambridge Bancorp and CrossFirst Bankshares
If you would invest 1,570 in CrossFirst Bankshares on September 1, 2024 and sell it today you would earn a total of 161.00 from holding CrossFirst Bankshares or generate 10.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Cambridge Bancorp vs. CrossFirst Bankshares
Performance |
| Timeline |
| Cambridge Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CrossFirst Bankshares |
Cambridge Bancorp and CrossFirst Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambridge Bancorp and CrossFirst Bankshares
The main advantage of trading using opposite Cambridge Bancorp and CrossFirst Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambridge Bancorp position performs unexpectedly, CrossFirst Bankshares 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 CrossFirst Bankshares will offset losses from the drop in CrossFirst Bankshares' long position.| Cambridge Bancorp vs. First Community | Cambridge Bancorp vs. Community West Bancshares | Cambridge Bancorp vs. First Financial Northwest | Cambridge Bancorp vs. First Northwest Bancorp |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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