Correlation Between FNCB Bancorp and Northfield Bancorp
Can any of the company-specific risk be diversified away by investing in both FNCB Bancorp and Northfield Bancorp 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 FNCB Bancorp and Northfield Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FNCB Bancorp and Northfield Bancorp, you can compare the effects of market volatilities on FNCB Bancorp and Northfield Bancorp 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 FNCB Bancorp with a short position of Northfield Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNCB Bancorp and Northfield Bancorp.
Diversification Opportunities for FNCB Bancorp and Northfield Bancorp
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FNCB and Northfield is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding FNCB Bancorp and Northfield Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northfield Bancorp and FNCB Bancorp 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 FNCB Bancorp are associated (or correlated) with Northfield Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northfield Bancorp has no effect on the direction of FNCB Bancorp i.e., FNCB Bancorp and Northfield Bancorp go up and down completely randomly.
Pair Corralation between FNCB Bancorp and Northfield Bancorp
If you would invest 1,186 in Northfield Bancorp on August 28, 2024 and sell it today you would earn a total of 201.00 from holding Northfield Bancorp or generate 16.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
FNCB Bancorp vs. Northfield Bancorp
Performance |
| Timeline |
| FNCB Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Northfield Bancorp |
FNCB Bancorp and Northfield Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNCB Bancorp and Northfield Bancorp
The main advantage of trading using opposite FNCB Bancorp and Northfield Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNCB Bancorp position performs unexpectedly, Northfield Bancorp 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 Northfield Bancorp will offset losses from the drop in Northfield Bancorp's long position.| FNCB Bancorp vs. Home Federal Bancorp | FNCB Bancorp vs. LINKBANCORP | FNCB Bancorp vs. Rhinebeck Bancorp | FNCB Bancorp vs. Lake Shore Bancorp |
| Northfield Bancorp vs. Finward Bancorp | Northfield Bancorp vs. Community West Bancshares | Northfield Bancorp vs. First Financial Northwest | Northfield Bancorp vs. Home 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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