Correlation Between ChoiceOne Financial and Affinity Bancshares
Can any of the company-specific risk be diversified away by investing in both ChoiceOne Financial 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 ChoiceOne Financial and Affinity Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChoiceOne Financial Services and Affinity Bancshares, you can compare the effects of market volatilities on ChoiceOne Financial 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 ChoiceOne Financial with a short position of Affinity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChoiceOne Financial and Affinity Bancshares.
Diversification Opportunities for ChoiceOne Financial and Affinity Bancshares
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between ChoiceOne and Affinity is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding ChoiceOne Financial Services and Affinity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Bancshares and ChoiceOne Financial 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 ChoiceOne Financial Services 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 ChoiceOne Financial i.e., ChoiceOne Financial and Affinity Bancshares go up and down completely randomly.
Pair Corralation between ChoiceOne Financial and Affinity Bancshares
Given the investment horizon of 90 days ChoiceOne Financial Services is expected to generate 1.3 times more return on investment than Affinity Bancshares. However, ChoiceOne Financial is 1.3 times more volatile than Affinity Bancshares. It trades about 0.05 of its potential returns per unit of risk. Affinity Bancshares is currently generating about 0.05 per unit of risk. If you would invest 2,312 in ChoiceOne Financial Services on August 30, 2024 and sell it today you would earn a total of 1,415 from holding ChoiceOne Financial Services or generate 61.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
ChoiceOne Financial Services vs. Affinity Bancshares
Performance |
| Timeline |
| ChoiceOne Financial |
| Affinity Bancshares |
ChoiceOne Financial and Affinity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChoiceOne Financial and Affinity Bancshares
The main advantage of trading using opposite ChoiceOne Financial and Affinity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChoiceOne Financial 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.| ChoiceOne Financial vs. Home Federal Bancorp | ChoiceOne Financial vs. First Northwest Bancorp | ChoiceOne Financial vs. Lake Shore Bancorp | ChoiceOne Financial vs. Affinity Bancshares |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |