Correlation Between FFW and Alpine Banks
Can any of the company-specific risk be diversified away by investing in both FFW and Alpine Banks 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 FFW and Alpine Banks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FFW Corporation and Alpine Banks of, you can compare the effects of market volatilities on FFW and Alpine Banks 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 FFW with a short position of Alpine Banks. Check out your portfolio center. Please also check ongoing floating volatility patterns of FFW and Alpine Banks.
Diversification Opportunities for FFW and Alpine Banks
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FFW and Alpine is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding FFW Corp. and Alpine Banks of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Banks and FFW 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 FFW Corporation are associated (or correlated) with Alpine Banks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Banks has no effect on the direction of FFW i.e., FFW and Alpine Banks go up and down completely randomly.
Pair Corralation between FFW and Alpine Banks
Given the investment horizon of 90 days FFW Corporation is expected to under-perform the Alpine Banks. In addition to that, FFW is 2.56 times more volatile than Alpine Banks of. It trades about 0.0 of its total potential returns per unit of risk. Alpine Banks of is currently generating about 0.08 per unit of volatility. If you would invest 2,631 in Alpine Banks of on September 2, 2024 and sell it today you would earn a total of 669.00 from holding Alpine Banks of or generate 25.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 65.32% |
| Values | Daily Returns |
FFW Corp. vs. Alpine Banks of
Performance |
| Timeline |
| FFW Corporation |
| Alpine Banks |
FFW and Alpine Banks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FFW and Alpine Banks
The main advantage of trading using opposite FFW and Alpine Banks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FFW position performs unexpectedly, Alpine Banks 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 Alpine Banks will offset losses from the drop in Alpine Banks' long position.| FFW vs. First Farmers Financial | FFW vs. Farmers Merchants Bancorp | FFW vs. Lakeland Financial | FFW vs. Eagle Financial Services |
| Alpine Banks vs. Piraeus Bank SA | Alpine Banks vs. Turkiye Garanti Bankasi | Alpine Banks vs. Uwharrie Capital Corp |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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