Correlation Between CrossFirst Bankshares and Provident Financial
Can any of the company-specific risk be diversified away by investing in both CrossFirst Bankshares and Provident 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 CrossFirst Bankshares and Provident Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CrossFirst Bankshares and Provident Financial Services, you can compare the effects of market volatilities on CrossFirst Bankshares and Provident 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 CrossFirst Bankshares with a short position of Provident Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CrossFirst Bankshares and Provident Financial.
Diversification Opportunities for CrossFirst Bankshares and Provident Financial
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CrossFirst and Provident is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding CrossFirst Bankshares and Provident Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provident Financial 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 Provident Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provident Financial has no effect on the direction of CrossFirst Bankshares i.e., CrossFirst Bankshares and Provident Financial go up and down completely randomly.
Pair Corralation between CrossFirst Bankshares and Provident Financial
Considering the 90-day investment horizon CrossFirst Bankshares is expected to generate 1.0 times more return on investment than Provident Financial. However, CrossFirst Bankshares is 1.0 times more volatile than Provident Financial Services. It trades about 0.04 of its potential returns per unit of risk. Provident Financial Services is currently generating about 0.02 per unit of risk. If you would invest 1,346 in CrossFirst Bankshares on August 24, 2024 and sell it today you would earn a total of 450.00 from holding CrossFirst Bankshares or generate 33.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CrossFirst Bankshares vs. Provident Financial Services
Performance |
| Timeline |
| CrossFirst Bankshares |
| Provident Financial |
CrossFirst Bankshares and Provident Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CrossFirst Bankshares and Provident Financial
The main advantage of trading using opposite CrossFirst Bankshares and Provident Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CrossFirst Bankshares position performs unexpectedly, Provident 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 Provident Financial will offset losses from the drop in Provident Financial'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 |
| Provident Financial vs. First Mid Illinois | Provident Financial vs. ConnectOne Bancorp | Provident Financial vs. Finward Bancorp | Provident Financial vs. CrossFirst Bankshares |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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