Correlation Between Coastal Financial and FS Bancorp
Can any of the company-specific risk be diversified away by investing in both Coastal Financial and FS 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 Coastal Financial and FS Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coastal Financial Corp and FS Bancorp, you can compare the effects of market volatilities on Coastal Financial and FS 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 Coastal Financial with a short position of FS Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coastal Financial and FS Bancorp.
Diversification Opportunities for Coastal Financial and FS Bancorp
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coastal and FXLG is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Financial Corp and FS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS Bancorp and Coastal Financial 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 Coastal Financial Corp are associated (or correlated) with FS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Bancorp has no effect on the direction of Coastal Financial i.e., Coastal Financial and FS Bancorp go up and down completely randomly.
Pair Corralation between Coastal Financial and FS Bancorp
Considering the 90-day investment horizon Coastal Financial Corp is expected to generate 7.01 times more return on investment than FS Bancorp. However, Coastal Financial is 7.01 times more volatile than FS Bancorp. It trades about 0.38 of its potential returns per unit of risk. FS Bancorp is currently generating about 0.21 per unit of risk. If you would invest 6,299 in Coastal Financial Corp on September 1, 2024 and sell it today you would earn a total of 1,356 from holding Coastal Financial Corp or generate 21.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coastal Financial Corp vs. FS Bancorp
Performance |
| Timeline |
| Coastal Financial Corp |
| FS Bancorp |
Coastal Financial and FS Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coastal Financial and FS Bancorp
The main advantage of trading using opposite Coastal Financial and FS Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Financial position performs unexpectedly, FS 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 FS Bancorp will offset losses from the drop in FS Bancorp's long position.| Coastal Financial vs. Affinity Bancshares | Coastal Financial vs. Home Federal Bancorp | Coastal Financial vs. First Business Financial | Coastal Financial vs. Old Point Financial |
| FS Bancorp vs. Eastern Michigan Financial | FS Bancorp vs. Grand River Commerce | FS Bancorp vs. Bank of Botetourt | FS Bancorp vs. AmeriServ 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |