Correlation Between Farmers Bank and Affinity Bancshares
Can any of the company-specific risk be diversified away by investing in both Farmers Bank and Affinity Bancshares 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 Farmers Bank and Affinity Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Farmers Bank and Affinity Bancshares, you can compare the effects of market volatilities on Farmers Bank and Affinity Bancshares 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 Farmers Bank with a short position of Affinity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Bank and Affinity Bancshares.
Diversification Opportunities for Farmers Bank and Affinity Bancshares
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Farmers and Affinity is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding The Farmers Bank and Affinity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Bancshares and Farmers Bank 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 The Farmers Bank are associated (or correlated) with Affinity Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affinity Bancshares has no effect on the direction of Farmers Bank i.e., Farmers Bank and Affinity Bancshares go up and down completely randomly.
Pair Corralation between Farmers Bank and Affinity Bancshares
Given the investment horizon of 90 days The Farmers Bank is expected to under-perform the Affinity Bancshares. In addition to that, Farmers Bank is 1.1 times more volatile than Affinity Bancshares. It trades about -0.09 of its total potential returns per unit of risk. Affinity Bancshares is currently generating about 0.08 per unit of volatility. If you would invest 2,140 in Affinity Bancshares on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Affinity Bancshares or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Farmers Bank vs. Affinity Bancshares
Performance |
| Timeline |
| Farmers Bank |
| Affinity Bancshares |
Farmers Bank and Affinity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Bank and Affinity Bancshares
The main advantage of trading using opposite Farmers Bank and Affinity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Bank position performs unexpectedly, Affinity Bancshares 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 Affinity Bancshares will offset losses from the drop in Affinity Bancshares' long position.| Farmers Bank vs. Piraeus Bank SA | Farmers Bank vs. Turkiye Garanti Bankasi | Farmers Bank vs. Delhi Bank Corp | Farmers Bank vs. Uwharrie Capital Corp |
| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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