Correlation Between Community West and AMB Financial
Can any of the company-specific risk be diversified away by investing in both Community West and AMB Financial 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 Community West and AMB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community West Bancshares and AMB Financial Corp, you can compare the effects of market volatilities on Community West and AMB Financial 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 Community West with a short position of AMB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community West and AMB Financial.
Diversification Opportunities for Community West and AMB Financial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Community and AMB is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Community West Bancshares and AMB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMB Financial Corp and Community West 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 Community West Bancshares are associated (or correlated) with AMB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMB Financial Corp has no effect on the direction of Community West i.e., Community West and AMB Financial go up and down completely randomly.
Pair Corralation between Community West and AMB Financial
Given the investment horizon of 90 days Community West Bancshares is expected to generate 3.08 times more return on investment than AMB Financial. However, Community West is 3.08 times more volatile than AMB Financial Corp. It trades about 0.06 of its potential returns per unit of risk. AMB Financial Corp is currently generating about -0.11 per unit of risk. If you would invest 1,098 in Community West Bancshares on September 4, 2024 and sell it today you would earn a total of 1,110 from holding Community West Bancshares or generate 101.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.04% |
| Values | Daily Returns |
Community West Bancshares vs. AMB Financial Corp
Performance |
| Timeline |
| Community West Bancshares |
| AMB Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Community West and AMB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community West and AMB Financial
The main advantage of trading using opposite Community West and AMB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community West position performs unexpectedly, AMB Financial 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 AMB Financial will offset losses from the drop in AMB Financial's long position.| Community West vs. International Bancshares | Community West vs. Finward Bancorp | Community West vs. Aquagold International | Community West vs. Thrivent High Yield |
| AMB Financial vs. First Community | AMB Financial vs. Community West Bancshares | AMB Financial vs. First Financial Northwest | AMB Financial vs. First 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |