Correlation Between Finward Bancorp and NBT Bancorp
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp and NBT Bancorp 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 NBT Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finward Bancorp and NBT Bancorp, you can compare the effects of market volatilities on Finward Bancorp and NBT Bancorp 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 NBT Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and NBT Bancorp.
Diversification Opportunities for Finward Bancorp and NBT Bancorp
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finward and NBT is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and NBT Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBT 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 NBT Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBT Bancorp has no effect on the direction of Finward Bancorp i.e., Finward Bancorp and NBT Bancorp go up and down completely randomly.
Pair Corralation between Finward Bancorp and NBT Bancorp
Given the investment horizon of 90 days Finward Bancorp is expected to under-perform the NBT Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Finward Bancorp is 3.28 times less risky than NBT Bancorp. The stock trades about -0.03 of its potential returns per unit of risk. The NBT Bancorp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,438 in NBT Bancorp on August 24, 2024 and sell it today you would earn a total of 607.00 from holding NBT Bancorp or generate 13.68% 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. NBT Bancorp
Performance |
| Timeline |
| Finward Bancorp |
| NBT Bancorp |
Finward Bancorp and NBT Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and NBT Bancorp
The main advantage of trading using opposite Finward Bancorp and NBT Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp position performs unexpectedly, NBT Bancorp 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 NBT Bancorp will offset losses from the drop in NBT Bancorp'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 |
| NBT Bancorp vs. Oak Valley Bancorp | NBT Bancorp vs. Home Federal Bancorp | NBT Bancorp vs. Finward Bancorp | NBT Bancorp vs. Community West Bancshares |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |