Correlation Between CF Bankshares and Finward Bancorp
Can any of the company-specific risk be diversified away by investing in both CF 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 CF 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 CF Bankshares and Finward Bancorp, you can compare the effects of market volatilities on CF 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 CF Bankshares with a short position of Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Bankshares and Finward Bancorp.
Diversification Opportunities for CF Bankshares and Finward Bancorp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CFBK and Finward is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CF Bankshares and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp 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 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 CF Bankshares i.e., CF Bankshares and Finward Bancorp go up and down completely randomly.
Pair Corralation between CF Bankshares and Finward Bancorp
Given the investment horizon of 90 days CF Bankshares is expected to generate 2.69 times more return on investment than Finward Bancorp. However, CF Bankshares is 2.69 times more volatile than Finward Bancorp. It trades about 0.16 of its potential returns per unit of risk. Finward Bancorp is currently generating about -0.06 per unit of risk. If you would invest 2,543 in CF Bankshares on August 29, 2024 and sell it today you would earn a total of 237.00 from holding CF Bankshares or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Bankshares vs. Finward Bancorp
Performance |
| Timeline |
| CF Bankshares |
| Finward Bancorp |
CF Bankshares and Finward Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Bankshares and Finward Bancorp
The main advantage of trading using opposite CF Bankshares and Finward Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF 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.| CF Bankshares vs. Magyar Bancorp | CF Bankshares vs. Home Federal Bancorp | CF Bankshares vs. Community West Bancshares | CF Bankshares vs. First Financial Northwest |
| Finward Bancorp vs. Fifth Third Bancorp | Finward Bancorp vs. Huntington Bancshares Incorporated | Finward Bancorp vs. MT Bank |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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