Correlation Between Dime Community and Capitol Federal
Can any of the company-specific risk be diversified away by investing in both Dime Community and Capitol Federal 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 Dime Community and Capitol Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dime Community Bancshares and Capitol Federal Financial, you can compare the effects of market volatilities on Dime Community and Capitol Federal 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 Dime Community with a short position of Capitol Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dime Community and Capitol Federal.
Diversification Opportunities for Dime Community and Capitol Federal
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dime and Capitol is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dime Community Bancshares and Capitol Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Federal Financial and Dime Community 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 Dime Community Bancshares are associated (or correlated) with Capitol Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Federal Financial has no effect on the direction of Dime Community i.e., Dime Community and Capitol Federal go up and down completely randomly.
Pair Corralation between Dime Community and Capitol Federal
Assuming the 90 days horizon Dime Community Bancshares is expected to generate 0.81 times more return on investment than Capitol Federal. However, Dime Community Bancshares is 1.24 times less risky than Capitol Federal. It trades about 0.02 of its potential returns per unit of risk. Capitol Federal Financial is currently generating about -0.01 per unit of risk. If you would invest 1,805 in Dime Community Bancshares on November 2, 2024 and sell it today you would earn a total of 255.00 from holding Dime Community Bancshares or generate 14.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dime Community Bancshares vs. Capitol Federal Financial
Performance |
| Timeline |
| Dime Community Bancshares |
| Capitol Federal Financial |
Dime Community and Capitol Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dime Community and Capitol Federal
The main advantage of trading using opposite Dime Community and Capitol Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dime Community position performs unexpectedly, Capitol Federal 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 Capitol Federal will offset losses from the drop in Capitol Federal's long position.| Dime Community vs. First Citizens BancShares | Dime Community vs. Fifth Third Bancorp | Dime Community vs. OceanFirst Financial Corp | Dime Community vs. Fifth Third Bancorp |
| Capitol Federal vs. Independent Bank | Capitol Federal vs. BankFinancial | Capitol Federal vs. Business First Bancshares | Capitol Federal vs. First 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |