Correlation Between Finward Bancorp and First Interstate
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp and First Interstate 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 First Interstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finward Bancorp and First Interstate BancSystem, you can compare the effects of market volatilities on Finward Bancorp and First Interstate 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 First Interstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and First Interstate.
Diversification Opportunities for Finward Bancorp and First Interstate
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Finward and First is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and First Interstate BancSystem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Interstate Ban 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 First Interstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Interstate Ban has no effect on the direction of Finward Bancorp i.e., Finward Bancorp and First Interstate go up and down completely randomly.
Pair Corralation between Finward Bancorp and First Interstate
Given the investment horizon of 90 days Finward Bancorp is expected to generate 0.59 times more return on investment than First Interstate. However, Finward Bancorp is 1.69 times less risky than First Interstate. It trades about 0.12 of its potential returns per unit of risk. First Interstate BancSystem is currently generating about 0.06 per unit of risk. If you would invest 2,133 in Finward Bancorp on September 5, 2024 and sell it today you would earn a total of 969.00 from holding Finward Bancorp or generate 45.43% 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. First Interstate BancSystem
Performance |
| Timeline |
| Finward Bancorp |
| First Interstate Ban |
Finward Bancorp and First Interstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and First Interstate
The main advantage of trading using opposite Finward Bancorp and First Interstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp position performs unexpectedly, First Interstate 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 First Interstate will offset losses from the drop in First Interstate'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 |
| First Interstate vs. Finward Bancorp | First Interstate vs. Aquagold International | First Interstate vs. Thrivent High Yield | First Interstate vs. Morningstar Unconstrained Allocation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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