Correlation Between CrossFirst Bankshares and Finward Bancorp
Can any of the company-specific risk be diversified away by investing in both CrossFirst Bankshares and Finward 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 CrossFirst Bankshares and Finward Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CrossFirst Bankshares and Finward Bancorp, you can compare the effects of market volatilities on CrossFirst Bankshares and Finward 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 CrossFirst Bankshares with a short position of Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CrossFirst Bankshares and Finward Bancorp.
Diversification Opportunities for CrossFirst Bankshares and Finward Bancorp
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CrossFirst and Finward is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding CrossFirst Bankshares and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp 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 Finward Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finward Bancorp has no effect on the direction of CrossFirst Bankshares i.e., CrossFirst Bankshares and Finward Bancorp go up and down completely randomly.
Pair Corralation between CrossFirst Bankshares and Finward Bancorp
Considering the 90-day investment horizon CrossFirst Bankshares is expected to generate 3.29 times more return on investment than Finward Bancorp. However, CrossFirst Bankshares is 3.29 times more volatile than Finward Bancorp. It trades about 0.14 of its potential returns per unit of risk. Finward Bancorp is currently generating about -0.04 per unit of risk. If you would invest 1,605 in CrossFirst Bankshares on August 30, 2024 and sell it today you would earn a total of 152.00 from holding CrossFirst Bankshares or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CrossFirst Bankshares vs. Finward Bancorp
Performance |
| Timeline |
| CrossFirst Bankshares |
| Finward Bancorp |
CrossFirst Bankshares and Finward Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CrossFirst Bankshares and Finward Bancorp
The main advantage of trading using opposite CrossFirst Bankshares and Finward Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CrossFirst Bankshares position performs unexpectedly, Finward 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 Finward Bancorp will offset losses from the drop in Finward Bancorp'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 |
| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward Bancorp vs. Home Federal 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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