Correlation Between Greene County and Affinity Bancshares
Can any of the company-specific risk be diversified away by investing in both Greene County and Affinity 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 Greene County and Affinity Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greene County Bancorp and Affinity Bancshares, you can compare the effects of market volatilities on Greene County and Affinity 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 Greene County with a short position of Affinity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greene County and Affinity Bancshares.
Diversification Opportunities for Greene County and Affinity Bancshares
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Greene and Affinity is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Greene County Bancorp and Affinity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Bancshares and Greene County 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 Greene County Bancorp are associated (or correlated) with Affinity Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affinity Bancshares has no effect on the direction of Greene County i.e., Greene County and Affinity Bancshares go up and down completely randomly.
Pair Corralation between Greene County and Affinity Bancshares
Given the investment horizon of 90 days Greene County Bancorp is expected to under-perform the Affinity Bancshares. In addition to that, Greene County is 6.19 times more volatile than Affinity Bancshares. It trades about -0.02 of its total potential returns per unit of risk. Affinity Bancshares is currently generating about 0.04 per unit of volatility. If you would invest 2,134 in Affinity Bancshares on August 29, 2024 and sell it today you would earn a total of 28.00 from holding Affinity Bancshares or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greene County Bancorp vs. Affinity Bancshares
Performance |
| Timeline |
| Greene County Bancorp |
| Affinity Bancshares |
Greene County and Affinity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greene County and Affinity Bancshares
The main advantage of trading using opposite Greene County and Affinity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greene County position performs unexpectedly, Affinity 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 Affinity Bancshares will offset losses from the drop in Affinity Bancshares' long position.| Greene County vs. Community West Bancshares | Greene County vs. First Northwest Bancorp | Greene County vs. Home Federal Bancorp | Greene County vs. First Financial Northwest |
| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. First Northwest Bancorp | Affinity Bancshares vs. First Financial Northwest | Affinity Bancshares vs. First Capital |
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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