Correlation Between Civista Bancshares and First Northwest
Can any of the company-specific risk be diversified away by investing in both Civista Bancshares and First Northwest 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 Civista Bancshares and First Northwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Civista Bancshares and First Northwest Bancorp, you can compare the effects of market volatilities on Civista Bancshares and First Northwest 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 Civista Bancshares with a short position of First Northwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Civista Bancshares and First Northwest.
Diversification Opportunities for Civista Bancshares and First Northwest
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Civista and First is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Civista Bancshares and First Northwest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Northwest Bancorp and Civista Bancshares 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 Civista Bancshares are associated (or correlated) with First Northwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Northwest Bancorp has no effect on the direction of Civista Bancshares i.e., Civista Bancshares and First Northwest go up and down completely randomly.
Pair Corralation between Civista Bancshares and First Northwest
Given the investment horizon of 90 days Civista Bancshares is expected to generate 1.35 times more return on investment than First Northwest. However, Civista Bancshares is 1.35 times more volatile than First Northwest Bancorp. It trades about 0.43 of its potential returns per unit of risk. First Northwest Bancorp is currently generating about 0.37 per unit of risk. If you would invest 1,835 in Civista Bancshares on August 28, 2024 and sell it today you would earn a total of 488.00 from holding Civista Bancshares or generate 26.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Civista Bancshares vs. First Northwest Bancorp
Performance |
| Timeline |
| Civista Bancshares |
| First Northwest Bancorp |
Civista Bancshares and First Northwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Civista Bancshares and First Northwest
The main advantage of trading using opposite Civista Bancshares and First Northwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Civista Bancshares position performs unexpectedly, First Northwest 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 First Northwest will offset losses from the drop in First Northwest's long position.| Civista Bancshares vs. Fifth Third Bancorp | Civista Bancshares vs. Zions Bancorporation | Civista Bancshares vs. Huntington Bancshares Incorporated | Civista Bancshares vs. Comerica |
| First Northwest vs. Fifth Third Bancorp | First Northwest vs. Zions Bancorporation | First Northwest vs. Huntington Bancshares Incorporated | First Northwest vs. Comerica |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |