Correlation Between Equity Bancshares, and BankFinancial
Can any of the company-specific risk be diversified away by investing in both Equity Bancshares, and BankFinancial 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 Equity Bancshares, and BankFinancial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Bancshares, and BankFinancial, you can compare the effects of market volatilities on Equity Bancshares, and BankFinancial 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 Equity Bancshares, with a short position of BankFinancial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Bancshares, and BankFinancial.
Diversification Opportunities for Equity Bancshares, and BankFinancial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Equity and BankFinancial is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and BankFinancial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankFinancial and Equity Bancshares, 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 Equity Bancshares, are associated (or correlated) with BankFinancial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankFinancial has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and BankFinancial go up and down completely randomly.
Pair Corralation between Equity Bancshares, and BankFinancial
Given the investment horizon of 90 days Equity Bancshares, is expected to generate 1.68 times more return on investment than BankFinancial. However, Equity Bancshares, is 1.68 times more volatile than BankFinancial. It trades about 0.23 of its potential returns per unit of risk. BankFinancial is currently generating about 0.31 per unit of risk. If you would invest 4,249 in Equity Bancshares, on September 1, 2024 and sell it today you would earn a total of 550.00 from holding Equity Bancshares, or generate 12.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Bancshares, vs. BankFinancial
Performance |
| Timeline |
| Equity Bancshares, |
| BankFinancial |
Equity Bancshares, and BankFinancial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Bancshares, and BankFinancial
The main advantage of trading using opposite Equity Bancshares, and BankFinancial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Bancshares, position performs unexpectedly, BankFinancial 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 BankFinancial will offset losses from the drop in BankFinancial's long position.| Equity Bancshares, vs. Brookline Bancorp | Equity Bancshares, vs. Kearny Financial Corp | Equity Bancshares, vs. Heritage Financial | Equity Bancshares, vs. FVCBankcorp |
| BankFinancial vs. First Business Financial | BankFinancial vs. Old Point Financial | BankFinancial vs. Parke Bancorp | BankFinancial vs. Community West Bancshares |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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