Correlation Between CrossFirst Bankshares and Auburn National
Can any of the company-specific risk be diversified away by investing in both CrossFirst Bankshares and Auburn National 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 CrossFirst Bankshares and Auburn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CrossFirst Bankshares and Auburn National Bancorporation, you can compare the effects of market volatilities on CrossFirst Bankshares and Auburn National 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 CrossFirst Bankshares with a short position of Auburn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of CrossFirst Bankshares and Auburn National.
Diversification Opportunities for CrossFirst Bankshares and Auburn National
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CrossFirst and Auburn is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CrossFirst Bankshares and Auburn National Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auburn National Banc and CrossFirst Bankshares 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 CrossFirst Bankshares are associated (or correlated) with Auburn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auburn National Banc has no effect on the direction of CrossFirst Bankshares i.e., CrossFirst Bankshares and Auburn National go up and down completely randomly.
Pair Corralation between CrossFirst Bankshares and Auburn National
Considering the 90-day investment horizon CrossFirst Bankshares is expected to under-perform the Auburn National. But the stock apears to be less risky and, when comparing its historical volatility, CrossFirst Bankshares is 1.14 times less risky than Auburn National. The stock trades about -0.08 of its potential returns per unit of risk. The Auburn National Bancorporation is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,319 in Auburn National Bancorporation on October 24, 2024 and sell it today you would lose (44.00) from holding Auburn National Bancorporation or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CrossFirst Bankshares vs. Auburn National Bancorp.
Performance |
| Timeline |
| CrossFirst Bankshares |
| Auburn National Banc |
CrossFirst Bankshares and Auburn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CrossFirst Bankshares and Auburn National
The main advantage of trading using opposite CrossFirst Bankshares and Auburn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CrossFirst Bankshares position performs unexpectedly, Auburn National 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 Auburn National will offset losses from the drop in Auburn National's long position.| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares vs. Community West Bancshares |
| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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