Correlation Between Finward Bancorp and Old National
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp and Old 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 Old 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 Old National Bancorp, you can compare the effects of market volatilities on Finward Bancorp and Old 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 Old National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and Old National.
Diversification Opportunities for Finward Bancorp and Old National
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finward and Old is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and Old National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old National 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 Old National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old National Bancorp has no effect on the direction of Finward Bancorp i.e., Finward Bancorp and Old National go up and down completely randomly.
Pair Corralation between Finward Bancorp and Old National
Given the investment horizon of 90 days Finward Bancorp is expected to generate 3.53 times less return on investment than Old National. But when comparing it to its historical volatility, Finward Bancorp is 1.43 times less risky than Old National. It trades about 0.07 of its potential returns per unit of risk. Old National Bancorp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,811 in Old National Bancorp on September 12, 2024 and sell it today you would earn a total of 498.00 from holding Old National Bancorp or generate 27.5% 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. Old National Bancorp
Performance |
| Timeline |
| Finward Bancorp |
| Old National Bancorp |
Finward Bancorp and Old National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and Old National
The main advantage of trading using opposite Finward Bancorp and Old National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp position performs unexpectedly, Old 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 Old National will offset losses from the drop in Old 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 |
| Old National vs. Independent Bank | Old National vs. First Financial Bancorp | Old National vs. Lakeland Financial | Old National vs. National Bank Holdings |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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