Correlation Between First Northwest and FNCB Bancorp
Can any of the company-specific risk be diversified away by investing in both First Northwest and FNCB 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 First Northwest and FNCB Bancorp 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 FNCB Bancorp, you can compare the effects of market volatilities on First Northwest and FNCB 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 First Northwest with a short position of FNCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Northwest and FNCB Bancorp.
Diversification Opportunities for First Northwest and FNCB Bancorp
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and FNCB is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Northwest Bancorp and FNCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNCB Bancorp 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 FNCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNCB Bancorp has no effect on the direction of First Northwest i.e., First Northwest and FNCB Bancorp go up and down completely randomly.
Pair Corralation between First Northwest and FNCB Bancorp
If you would invest 1,006 in First Northwest Bancorp on August 28, 2024 and sell it today you would earn a total of 163.00 from holding First Northwest Bancorp or generate 16.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
First Northwest Bancorp vs. FNCB Bancorp
Performance |
| Timeline |
| First Northwest Bancorp |
| FNCB Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Northwest and FNCB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Northwest and FNCB Bancorp
The main advantage of trading using opposite First Northwest and FNCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Northwest position performs unexpectedly, FNCB 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 FNCB Bancorp will offset losses from the drop in FNCB Bancorp's long position.| First Northwest vs. Fifth Third Bancorp | First Northwest vs. Huntington Bancshares Incorporated | First Northwest vs. Comerica | First Northwest vs. MT Bank |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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