Correlation Between First Northwest and American National
Can any of the company-specific risk be diversified away by investing in both First Northwest and American National 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 Northwest and American National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Northwest Bancorp and American National Bankshares, you can compare the effects of market volatilities on First Northwest and American National 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 Northwest with a short position of American National. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Northwest and American National.
Diversification Opportunities for First Northwest and American National
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and American is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding First Northwest Bancorp and American National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American National and First Northwest 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 Northwest Bancorp are associated (or correlated) with American National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American National has no effect on the direction of First Northwest i.e., First Northwest and American National go up and down completely randomly.
Pair Corralation between First Northwest and American National
If you would invest 1,006 in First Northwest Bancorp on August 29, 2024 and sell it today you would earn a total of 151.00 from holding First Northwest Bancorp or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
First Northwest Bancorp vs. American National Bankshares
Performance |
| Timeline |
| First Northwest Bancorp |
| American National |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Northwest and American National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Northwest and American National
The main advantage of trading using opposite First Northwest and American National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Northwest position performs unexpectedly, American National 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 American National will offset losses from the drop in American National's long position.| First Northwest vs. Fifth Third Bancorp | First Northwest vs. Huntington Bancshares Incorporated | First Northwest vs. MT Bank |
| American National vs. First Northwest Bancorp | American National vs. Community West Bancshares | American National vs. First Financial Northwest | American National vs. Great Southern 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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