Correlation Between FS Bancorp and Grand River
Can any of the company-specific risk be diversified away by investing in both FS Bancorp and Grand River 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 FS Bancorp and Grand River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FS Bancorp and Grand River Commerce, you can compare the effects of market volatilities on FS Bancorp and Grand River 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 FS Bancorp with a short position of Grand River. Check out your portfolio center. Please also check ongoing floating volatility patterns of FS Bancorp and Grand River.
Diversification Opportunities for FS Bancorp and Grand River
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between FXLG and Grand is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding FS Bancorp and Grand River Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand River Commerce and FS 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 FS Bancorp are associated (or correlated) with Grand River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand River Commerce has no effect on the direction of FS Bancorp i.e., FS Bancorp and Grand River go up and down completely randomly.
Pair Corralation between FS Bancorp and Grand River
Given the investment horizon of 90 days FS Bancorp is expected to generate 0.28 times more return on investment than Grand River. However, FS Bancorp is 3.51 times less risky than Grand River. It trades about 0.15 of its potential returns per unit of risk. Grand River Commerce is currently generating about 0.02 per unit of risk. If you would invest 2,820 in FS Bancorp on August 25, 2024 and sell it today you would earn a total of 330.00 from holding FS Bancorp or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.06% |
| Values | Daily Returns |
FS Bancorp vs. Grand River Commerce
Performance |
| Timeline |
| FS Bancorp |
| Grand River Commerce |
FS Bancorp and Grand River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FS Bancorp and Grand River
The main advantage of trading using opposite FS Bancorp and Grand River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FS Bancorp position performs unexpectedly, Grand River 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 Grand River will offset losses from the drop in Grand River's long position.| FS Bancorp vs. Standard Bank Group | FS Bancorp vs. PSB Holdings | FS Bancorp vs. United Overseas Bank | FS Bancorp vs. Turkiye Garanti Bankasi |
| Grand River vs. Standard Bank Group | Grand River vs. PSB Holdings | Grand River vs. United Overseas Bank | Grand River vs. Turkiye Garanti Bankasi |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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