Correlation Between Greenville Federal and Norwood Financial
Can any of the company-specific risk be diversified away by investing in both Greenville Federal and Norwood Financial 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 Greenville Federal and Norwood Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenville Federal Financial and Norwood Financial Corp, you can compare the effects of market volatilities on Greenville Federal and Norwood Financial 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 Greenville Federal with a short position of Norwood Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenville Federal and Norwood Financial.
Diversification Opportunities for Greenville Federal and Norwood Financial
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greenville and Norwood is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Greenville Federal Financial and Norwood Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norwood Financial Corp and Greenville Federal 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 Greenville Federal Financial are associated (or correlated) with Norwood Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norwood Financial Corp has no effect on the direction of Greenville Federal i.e., Greenville Federal and Norwood Financial go up and down completely randomly.
Pair Corralation between Greenville Federal and Norwood Financial
Given the investment horizon of 90 days Greenville Federal Financial is expected to generate 0.11 times more return on investment than Norwood Financial. However, Greenville Federal Financial is 8.95 times less risky than Norwood Financial. It trades about 0.31 of its potential returns per unit of risk. Norwood Financial Corp is currently generating about -0.07 per unit of risk. If you would invest 721.00 in Greenville Federal Financial on November 27, 2024 and sell it today you would earn a total of 9.00 from holding Greenville Federal Financial or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Greenville Federal Financial vs. Norwood Financial Corp
Performance |
| Timeline |
| Greenville Federal |
| Norwood Financial Corp |
Greenville Federal and Norwood Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenville Federal and Norwood Financial
The main advantage of trading using opposite Greenville Federal and Norwood Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenville Federal position performs unexpectedly, Norwood Financial 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 Norwood Financial will offset losses from the drop in Norwood Financial's long position.| Greenville Federal vs. First Bankers Trustshares | Greenville Federal vs. First Ottawa Bancshares | Greenville Federal vs. Coastal Carolina Bancshares | Greenville Federal vs. Citizens Bancorp Investment |
| Norwood Financial vs. Chemung Financial Corp | Norwood Financial vs. Home Federal Bancorp | Norwood Financial vs. Rhinebeck Bancorp | Norwood Financial vs. Finward 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.
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