Correlation Between Finward Bancorp and Peapack Gladstone
Can any of the company-specific risk be diversified away by investing in both Finward Bancorp and Peapack Gladstone 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 Peapack Gladstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finward Bancorp and Peapack Gladstone Financial, you can compare the effects of market volatilities on Finward Bancorp and Peapack Gladstone 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 Peapack Gladstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finward Bancorp and Peapack Gladstone.
Diversification Opportunities for Finward Bancorp and Peapack Gladstone
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Finward and Peapack is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Finward Bancorp and Peapack Gladstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peapack Gladstone 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 Peapack Gladstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peapack Gladstone has no effect on the direction of Finward Bancorp i.e., Finward Bancorp and Peapack Gladstone go up and down completely randomly.
Pair Corralation between Finward Bancorp and Peapack Gladstone
Given the investment horizon of 90 days Finward Bancorp is expected to under-perform the Peapack Gladstone. But the stock apears to be less risky and, when comparing its historical volatility, Finward Bancorp is 3.42 times less risky than Peapack Gladstone. The stock trades about -0.07 of its potential returns per unit of risk. The Peapack Gladstone Financial is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,320 in Peapack Gladstone Financial on August 28, 2024 and sell it today you would earn a total of 344.00 from holding Peapack Gladstone Financial or generate 10.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finward Bancorp vs. Peapack Gladstone Financial
Performance |
| Timeline |
| Finward Bancorp |
| Peapack Gladstone |
Finward Bancorp and Peapack Gladstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finward Bancorp and Peapack Gladstone
The main advantage of trading using opposite Finward Bancorp and Peapack Gladstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finward Bancorp position performs unexpectedly, Peapack Gladstone 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 Peapack Gladstone will offset losses from the drop in Peapack Gladstone'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 |
| Peapack Gladstone vs. Fifth Third Bancorp | Peapack Gladstone vs. Zions Bancorporation | Peapack Gladstone vs. Huntington Bancshares Incorporated | Peapack Gladstone vs. Comerica |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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