Correlation Between Community West and Logansport Financial
Can any of the company-specific risk be diversified away by investing in both Community West and Logansport 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 Logansport 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 Logansport Financial Corp, you can compare the effects of market volatilities on Community West and Logansport 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 Logansport Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community West and Logansport Financial.
Diversification Opportunities for Community West and Logansport Financial
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Community and Logansport is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Community West Bancshares and Logansport Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logansport 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 Logansport Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logansport Financial Corp has no effect on the direction of Community West i.e., Community West and Logansport Financial go up and down completely randomly.
Pair Corralation between Community West and Logansport Financial
If you would invest 1,385 in Community West Bancshares on November 2, 2024 and sell it today you would earn a total of 553.50 from holding Community West Bancshares or generate 39.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.2% |
| Values | Daily Returns |
Community West Bancshares vs. Logansport Financial Corp
Performance |
| Timeline |
| Community West Bancshares |
| Logansport Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Community West and Logansport Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community West and Logansport Financial
The main advantage of trading using opposite Community West and Logansport Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community West position performs unexpectedly, Logansport 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 Logansport Financial will offset losses from the drop in Logansport Financial'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 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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