Correlation Between Community West and Bank7 Corp
Can any of the company-specific risk be diversified away by investing in both Community West and Bank7 Corp 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 Bank7 Corp 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 Bank7 Corp, you can compare the effects of market volatilities on Community West and Bank7 Corp 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 Bank7 Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community West and Bank7 Corp.
Diversification Opportunities for Community West and Bank7 Corp
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Community and Bank7 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Community West Bancshares and Bank7 Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank7 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 Bank7 Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank7 Corp has no effect on the direction of Community West i.e., Community West and Bank7 Corp go up and down completely randomly.
Pair Corralation between Community West and Bank7 Corp
Given the investment horizon of 90 days Community West Bancshares is expected to generate 3.43 times more return on investment than Bank7 Corp. However, Community West is 3.43 times more volatile than Bank7 Corp. It trades about 0.05 of its potential returns per unit of risk. Bank7 Corp is currently generating about 0.06 per unit of risk. If you would invest 1,383 in Community West Bancshares on September 1, 2024 and sell it today you would earn a total of 809.00 from holding Community West Bancshares or generate 58.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Community West Bancshares vs. Bank7 Corp
Performance |
| Timeline |
| Community West Bancshares |
| Bank7 Corp |
Community West and Bank7 Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community West and Bank7 Corp
The main advantage of trading using opposite Community West and Bank7 Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community West position performs unexpectedly, Bank7 Corp 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 Bank7 Corp will offset losses from the drop in Bank7 Corp's long position.| Community West vs. Home Federal Bancorp | Community West vs. Magyar Bancorp | Community West vs. First Northwest Bancorp | Community West vs. First Financial Northwest |
| Bank7 Corp vs. Home Federal Bancorp | Bank7 Corp vs. First Financial Northwest | Bank7 Corp vs. First Northwest Bancorp | Bank7 Corp vs. First Capital |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |