Correlation Between Finward Bancorp and Great Southern
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp and Great Southern 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 Great Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finward Bancorp and Great Southern Bancorp, you can compare the effects of market volatilities on Finward Bancorp and Great Southern 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 Great Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and Great Southern.
Diversification Opportunities for Finward Bancorp and Great Southern
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Finward and Great is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and Great Southern Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Southern Bancorp 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 Great Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Southern Bancorp has no effect on the direction of Finward Bancorp i.e., Finward Bancorp and Great Southern go up and down completely randomly.
Pair Corralation between Finward Bancorp and Great Southern
Given the investment horizon of 90 days Finward Bancorp is expected to under-perform the Great Southern. But the stock apears to be less risky and, when comparing its historical volatility, Finward Bancorp is 3.56 times less risky than Great Southern. The stock trades about -0.03 of its potential returns per unit of risk. The Great Southern Bancorp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,819 in Great Southern Bancorp on August 24, 2024 and sell it today you would earn a total of 443.00 from holding Great Southern Bancorp or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finward Bancorp vs. Great Southern Bancorp
Performance |
| Timeline |
| Finward Bancorp |
| Great Southern Bancorp |
Finward Bancorp and Great Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and Great Southern
The main advantage of trading using opposite Finward Bancorp and Great Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp position performs unexpectedly, Great Southern 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 Great Southern will offset losses from the drop in Great Southern'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 |
| Great Southern vs. First Northwest Bancorp | Great Southern vs. Community West Bancshares | Great Southern vs. First Financial Northwest | Great Southern vs. First Capital |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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