Correlation Between Flexible Solutions and Croghan Bancshares
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions and Croghan Bancshares 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 Flexible Solutions and Croghan Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and Croghan Bancshares, you can compare the effects of market volatilities on Flexible Solutions and Croghan Bancshares 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 Flexible Solutions with a short position of Croghan Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Croghan Bancshares.
Diversification Opportunities for Flexible Solutions and Croghan Bancshares
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flexible and Croghan is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Croghan Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croghan Bancshares and Flexible Solutions 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 Flexible Solutions International are associated (or correlated) with Croghan Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croghan Bancshares has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and Croghan Bancshares go up and down completely randomly.
Pair Corralation between Flexible Solutions and Croghan Bancshares
Considering the 90-day investment horizon Flexible Solutions International is expected to under-perform the Croghan Bancshares. In addition to that, Flexible Solutions is 5.6 times more volatile than Croghan Bancshares. It trades about -0.27 of its total potential returns per unit of risk. Croghan Bancshares is currently generating about -0.31 per unit of volatility. If you would invest 4,800 in Croghan Bancshares on January 10, 2025 and sell it today you would lose (273.00) from holding Croghan Bancshares or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Croghan Bancshares
Performance |
| Timeline |
| Flexible Solutions |
| Croghan Bancshares |
Flexible Solutions and Croghan Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Croghan Bancshares
The main advantage of trading using opposite Flexible Solutions and Croghan Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions position performs unexpectedly, Croghan Bancshares 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 Croghan Bancshares will offset losses from the drop in Croghan Bancshares' long position.| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
| Croghan Bancshares vs. ScanSource | Croghan Bancshares vs. Borr Drilling | Croghan Bancshares vs. Precision Drilling | Croghan Bancshares vs. Delek Drilling |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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