Correlation Between CF Bankshares and Affinity Bancshares
Can any of the company-specific risk be diversified away by investing in both CF Bankshares and Affinity Bancshares 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 CF Bankshares and Affinity Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Bankshares and Affinity Bancshares, you can compare the effects of market volatilities on CF Bankshares and Affinity Bancshares 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 CF Bankshares with a short position of Affinity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Bankshares and Affinity Bancshares.
Diversification Opportunities for CF Bankshares and Affinity Bancshares
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CFBK and Affinity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CF Bankshares and Affinity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Bancshares and CF 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 CF Bankshares are associated (or correlated) with Affinity Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affinity Bancshares has no effect on the direction of CF Bankshares i.e., CF Bankshares and Affinity Bancshares go up and down completely randomly.
Pair Corralation between CF Bankshares and Affinity Bancshares
Given the investment horizon of 90 days CF Bankshares is expected to generate 3.51 times more return on investment than Affinity Bancshares. However, CF Bankshares is 3.51 times more volatile than Affinity Bancshares. It trades about 0.15 of its potential returns per unit of risk. Affinity Bancshares is currently generating about 0.06 per unit of risk. If you would invest 2,562 in CF Bankshares on August 30, 2024 and sell it today you would earn a total of 218.00 from holding CF Bankshares or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CF Bankshares vs. Affinity Bancshares
Performance |
| Timeline |
| CF Bankshares |
| Affinity Bancshares |
CF Bankshares and Affinity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Bankshares and Affinity Bancshares
The main advantage of trading using opposite CF Bankshares and Affinity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Bankshares position performs unexpectedly, Affinity Bancshares 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 Affinity Bancshares will offset losses from the drop in Affinity Bancshares' long position.| CF Bankshares vs. SVB T Corp | CF Bankshares vs. First Capital | CF Bankshares vs. Pioneer Bankcorp | CF Bankshares vs. Liberty Northwest Bancorp |
| Affinity Bancshares vs. SVB T Corp | Affinity Bancshares vs. First Capital | Affinity Bancshares vs. Pioneer Bankcorp | Affinity Bancshares vs. Liberty Northwest 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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