Correlation Between FS Bancorp and Infinity Bank
Can any of the company-specific risk be diversified away by investing in both FS Bancorp and Infinity Bank 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 Infinity Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FS Bancorp and Infinity Bank, you can compare the effects of market volatilities on FS Bancorp and Infinity Bank 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 Infinity Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of FS Bancorp and Infinity Bank.
Diversification Opportunities for FS Bancorp and Infinity Bank
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FXLG and Infinity is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding FS Bancorp and Infinity Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinity Bank 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 Infinity Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinity Bank has no effect on the direction of FS Bancorp i.e., FS Bancorp and Infinity Bank go up and down completely randomly.
Pair Corralation between FS Bancorp and Infinity Bank
Given the investment horizon of 90 days FS Bancorp is expected to generate 1.67 times less return on investment than Infinity Bank. But when comparing it to its historical volatility, FS Bancorp is 1.01 times less risky than Infinity Bank. It trades about 0.05 of its potential returns per unit of risk. Infinity Bank is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 916.00 in Infinity Bank on November 21, 2024 and sell it today you would earn a total of 119.00 from holding Infinity Bank or generate 12.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 47.03% |
| Values | Daily Returns |
FS Bancorp vs. Infinity Bank
Performance |
| Timeline |
| FS Bancorp |
| Infinity Bank |
FS Bancorp and Infinity Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FS Bancorp and Infinity Bank
The main advantage of trading using opposite FS Bancorp and Infinity Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FS Bancorp position performs unexpectedly, Infinity Bank 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 Infinity Bank will offset losses from the drop in Infinity Bank's long position.| FS Bancorp vs. Eastern Michigan Financial | FS Bancorp vs. Grand River Commerce | FS Bancorp vs. Bank of Botetourt | FS Bancorp vs. AmeriServ Financial |
| Infinity Bank vs. Bank Mandiri Persero | Infinity Bank vs. Century Financial Corp | Infinity Bank vs. Bank of Botetourt | Infinity Bank vs. FS Bancorp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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