Correlation Between Finward Bancorp and Farmers National
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp and Farmers 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 Farmers 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 Farmers National Banc, you can compare the effects of market volatilities on Finward Bancorp and Farmers 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 Farmers National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and Farmers National.
Diversification Opportunities for Finward Bancorp and Farmers National
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finward and Farmers is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and Farmers National Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers National Banc 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 Farmers National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers National Banc has no effect on the direction of Finward Bancorp i.e., Finward Bancorp and Farmers National go up and down completely randomly.
Pair Corralation between Finward Bancorp and Farmers National
Given the investment horizon of 90 days Finward Bancorp is expected to generate 0.72 times more return on investment than Farmers National. However, Finward Bancorp is 1.38 times less risky than Farmers National. It trades about 0.13 of its potential returns per unit of risk. Farmers National Banc is currently generating about 0.04 per unit of risk. If you would invest 2,716 in Finward Bancorp on September 4, 2024 and sell it today you would earn a total of 386.00 from holding Finward Bancorp or generate 14.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finward Bancorp vs. Farmers National Banc
Performance |
| Timeline |
| Finward Bancorp |
| Farmers National Banc |
Finward Bancorp and Farmers National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and Farmers National
The main advantage of trading using opposite Finward Bancorp and Farmers National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp position performs unexpectedly, Farmers 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 Farmers National will offset losses from the drop in Farmers National'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 |
| Farmers National vs. International Bancshares | Farmers National vs. Finward Bancorp | Farmers National vs. Aquagold International | Farmers National vs. Thrivent High Yield |
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 Positions Ratings module to 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.
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