Correlation Between First Financial and AMB Financial
Can any of the company-specific risk be diversified away by investing in both First Financial and AMB 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 First Financial and AMB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Financial Northwest and AMB Financial Corp, you can compare the effects of market volatilities on First Financial and AMB 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 First Financial with a short position of AMB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Financial and AMB Financial.
Diversification Opportunities for First Financial and AMB Financial
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and AMB is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding First Financial Northwest and AMB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMB Financial Corp and First Financial 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 First Financial Northwest are associated (or correlated) with AMB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMB Financial Corp has no effect on the direction of First Financial i.e., First Financial and AMB Financial go up and down completely randomly.
Pair Corralation between First Financial and AMB Financial
If you would invest 1,189 in First Financial Northwest on September 4, 2024 and sell it today you would earn a total of 1,068 from holding First Financial Northwest or generate 89.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.34% |
| Values | Daily Returns |
First Financial Northwest vs. AMB Financial Corp
Performance |
| Timeline |
| First Financial Northwest |
| AMB Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Financial and AMB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Financial and AMB Financial
The main advantage of trading using opposite First Financial and AMB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Financial position performs unexpectedly, AMB 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 AMB Financial will offset losses from the drop in AMB Financial's long position.| First Financial vs. International Bancshares | First Financial vs. Finward Bancorp | First Financial vs. Aquagold International | First Financial vs. Thrivent High Yield |
| AMB Financial vs. First Community | AMB Financial vs. Community West Bancshares | AMB Financial vs. First Financial Northwest | AMB Financial vs. First Northwest 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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