Correlation Between Finward Bancorp and Commercial National
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp and Commercial 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 Finward Bancorp and Commercial National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finward Bancorp and Commercial National Financial, you can compare the effects of market volatilities on Finward Bancorp and Commercial 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 Finward Bancorp with a short position of Commercial National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and Commercial National.
Diversification Opportunities for Finward Bancorp and Commercial National
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Finward and Commercial is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and Commercial National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial National 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 Commercial National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial National has no effect on the direction of Finward Bancorp i.e., Finward Bancorp and Commercial National go up and down completely randomly.
Pair Corralation between Finward Bancorp and Commercial National
Given the investment horizon of 90 days Finward Bancorp is expected to under-perform the Commercial National. But the stock apears to be less risky and, when comparing its historical volatility, Finward Bancorp is 2.39 times less risky than Commercial National. The stock trades about -0.29 of its potential returns per unit of risk. The Commercial National Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,021 in Commercial National Financial on November 8, 2024 and sell it today you would earn a total of 32.00 from holding Commercial National Financial or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finward Bancorp vs. Commercial National Financial
Performance |
| Timeline |
| Finward Bancorp |
| Commercial National |
Finward Bancorp and Commercial National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and Commercial National
The main advantage of trading using opposite Finward Bancorp and Commercial National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp position performs unexpectedly, Commercial 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 Commercial National will offset losses from the drop in Commercial National's long position.| Finward Bancorp vs. US Bancorp | Finward Bancorp vs. Truist Financial Corp | Finward Bancorp vs. KeyCorp | Finward Bancorp vs. Citizens Financial Group, |
| Commercial National vs. Eastern Michigan Financial | Commercial National vs. Mifflinburg Bancorp | Commercial National vs. Apollo Bancorp | Commercial National vs. Community Bankers |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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