Correlation Between CF Bankshares and CrossFirst Bankshares
Can any of the company-specific risk be diversified away by investing in both CF Bankshares and CrossFirst Bankshares 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 CrossFirst Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Bankshares and CrossFirst Bankshares, you can compare the effects of market volatilities on CF Bankshares and CrossFirst Bankshares 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 CrossFirst Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Bankshares and CrossFirst Bankshares.
Diversification Opportunities for CF Bankshares and CrossFirst Bankshares
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between CFBK and CrossFirst is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding CF Bankshares and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares 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 CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of CF Bankshares i.e., CF Bankshares and CrossFirst Bankshares go up and down completely randomly.
Pair Corralation between CF Bankshares and CrossFirst Bankshares
Given the investment horizon of 90 days CF Bankshares is expected to generate 0.76 times more return on investment than CrossFirst Bankshares. However, CF Bankshares is 1.32 times less risky than CrossFirst Bankshares. It trades about 0.2 of its potential returns per unit of risk. CrossFirst Bankshares is currently generating about 0.14 per unit of risk. If you would invest 2,492 in CF Bankshares on August 24, 2024 and sell it today you would earn a total of 303.00 from holding CF Bankshares or generate 12.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Bankshares vs. CrossFirst Bankshares
Performance |
| Timeline |
| CF Bankshares |
| CrossFirst Bankshares |
CF Bankshares and CrossFirst Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Bankshares and CrossFirst Bankshares
The main advantage of trading using opposite CF Bankshares and CrossFirst Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Bankshares position performs unexpectedly, CrossFirst Bankshares 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 CrossFirst Bankshares will offset losses from the drop in CrossFirst Bankshares' long position.| CF Bankshares vs. Banco Bradesco SA | CF Bankshares vs. Itau Unibanco Banco | CF Bankshares vs. Banco Santander Brasil | CF Bankshares vs. Western Alliance Bancorporation |
| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares vs. Community West Bancshares |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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