Correlation Between German American and IF Bancorp
Can any of the company-specific risk be diversified away by investing in both German American and IF Bancorp 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 German American and IF Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between German American Bancorp and IF Bancorp, you can compare the effects of market volatilities on German American and IF Bancorp 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 German American with a short position of IF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of German American and IF Bancorp.
Diversification Opportunities for German American and IF Bancorp
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between German and IROQ is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding German American Bancorp and IF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IF Bancorp and German American 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 German American Bancorp are associated (or correlated) with IF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IF Bancorp has no effect on the direction of German American i.e., German American and IF Bancorp go up and down completely randomly.
Pair Corralation between German American and IF Bancorp
Given the investment horizon of 90 days German American Bancorp is expected to under-perform the IF Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, German American Bancorp is 1.5 times less risky than IF Bancorp. The stock trades about -0.2 of its potential returns per unit of risk. The IF Bancorp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,106 in IF Bancorp on October 20, 2024 and sell it today you would earn a total of 347.00 from holding IF Bancorp or generate 16.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
German American Bancorp vs. IF Bancorp
Performance |
| Timeline |
| German American Bancorp |
| IF Bancorp |
German American and IF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with German American and IF Bancorp
The main advantage of trading using opposite German American and IF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if German American position performs unexpectedly, IF Bancorp 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 IF Bancorp will offset losses from the drop in IF Bancorp's long position.| German American vs. Lakeland Financial | German American vs. Great Southern Bancorp | German American vs. First Merchants | German American vs. First Financial |
| IF Bancorp vs. Home Bancorp | IF Bancorp vs. Commerzbank AG PK | IF Bancorp vs. ConnectOne Bancorp | IF Bancorp vs. Home Federal 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |