Correlation Between Finward Bancorp and CNB Financial
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp and CNB 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 Finward Bancorp and CNB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finward Bancorp and CNB Financial, you can compare the effects of market volatilities on Finward Bancorp and CNB 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 Finward Bancorp with a short position of CNB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and CNB Financial.
Diversification Opportunities for Finward Bancorp and CNB Financial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Finward and CNB is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and CNB Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNB Financial and Finward 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 Finward Bancorp are associated (or correlated) with CNB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNB Financial has no effect on the direction of Finward Bancorp i.e., Finward Bancorp and CNB Financial go up and down completely randomly.
Pair Corralation between Finward Bancorp and CNB Financial
Given the investment horizon of 90 days Finward Bancorp is expected to generate 1.36 times less return on investment than CNB Financial. But when comparing it to its historical volatility, Finward Bancorp is 1.43 times less risky than CNB Financial. It trades about 0.12 of its potential returns per unit of risk. CNB Financial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,423 in CNB Financial on August 28, 2024 and sell it today you would earn a total of 415.00 from holding CNB Financial or generate 17.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finward Bancorp vs. CNB Financial
Performance |
| Timeline |
| Finward Bancorp |
| CNB Financial |
Finward Bancorp and CNB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and CNB Financial
The main advantage of trading using opposite Finward Bancorp and CNB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp position performs unexpectedly, CNB 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 CNB Financial will offset losses from the drop in CNB Financial's long position.| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward Bancorp vs. Home Federal Bancorp |
| CNB Financial vs. Fifth Third Bancorp | CNB Financial vs. Zions Bancorporation | CNB Financial vs. Huntington Bancshares Incorporated | CNB Financial vs. Comerica |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |