Correlation Between Exchange Bankshares and Frontier Group
Can any of the company-specific risk be diversified away by investing in both Exchange Bankshares and Frontier Group 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 Exchange Bankshares and Frontier Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Bankshares and Frontier Group Holdings, you can compare the effects of market volatilities on Exchange Bankshares and Frontier Group 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 Exchange Bankshares with a short position of Frontier Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Bankshares and Frontier Group.
Diversification Opportunities for Exchange Bankshares and Frontier Group
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exchange and Frontier is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Bankshares and Frontier Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Group Holdings and Exchange Bankshares 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 Exchange Bankshares are associated (or correlated) with Frontier Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Group Holdings has no effect on the direction of Exchange Bankshares i.e., Exchange Bankshares and Frontier Group go up and down completely randomly.
Pair Corralation between Exchange Bankshares and Frontier Group
If you would invest 711.00 in Frontier Group Holdings on November 4, 2024 and sell it today you would earn a total of 132.00 from holding Frontier Group Holdings or generate 18.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exchange Bankshares vs. Frontier Group Holdings
Performance |
| Timeline |
| Exchange Bankshares |
| Frontier Group Holdings |
Exchange Bankshares and Frontier Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Bankshares and Frontier Group
The main advantage of trading using opposite Exchange Bankshares and Frontier Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Bankshares position performs unexpectedly, Frontier Group 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 Frontier Group will offset losses from the drop in Frontier Group's long position.| Exchange Bankshares vs. First Community Financial | Exchange Bankshares vs. National Capital Bank | Exchange Bankshares vs. Oakworth Capital | Exchange Bankshares vs. Truxton |
| Frontier Group vs. JetBlue Airways Corp | Frontier Group vs. Southwest Airlines | Frontier Group vs. United Airlines Holdings | Frontier Group vs. American Airlines Group |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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