Correlation Between Hope Bancorp and Finward Bancorp
Can any of the company-specific risk be diversified away by investing in both Hope Bancorp and Finward 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 Hope Bancorp and Finward Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hope Bancorp and Finward Bancorp, you can compare the effects of market volatilities on Hope Bancorp and Finward 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 Hope Bancorp with a short position of Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hope Bancorp and Finward Bancorp.
Diversification Opportunities for Hope Bancorp and Finward Bancorp
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hope and Finward is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hope Bancorp and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp and Hope 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 Hope Bancorp are associated (or correlated) with Finward Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finward Bancorp has no effect on the direction of Hope Bancorp i.e., Hope Bancorp and Finward Bancorp go up and down completely randomly.
Pair Corralation between Hope Bancorp and Finward Bancorp
Given the investment horizon of 90 days Hope Bancorp is expected to under-perform the Finward Bancorp. In addition to that, Hope Bancorp is 1.09 times more volatile than Finward Bancorp. It trades about -0.08 of its total potential returns per unit of risk. Finward Bancorp is currently generating about -0.05 per unit of volatility. If you would invest 3,100 in Finward Bancorp on September 13, 2024 and sell it today you would lose (33.00) from holding Finward Bancorp or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hope Bancorp vs. Finward Bancorp
Performance |
| Timeline |
| Hope Bancorp |
| Finward Bancorp |
Hope Bancorp and Finward Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hope Bancorp and Finward Bancorp
The main advantage of trading using opposite Hope Bancorp and Finward Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hope Bancorp position performs unexpectedly, Finward 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 Finward Bancorp will offset losses from the drop in Finward Bancorp's long position.| Hope Bancorp vs. OP Bancorp | Hope Bancorp vs. PCB Bancorp | Hope Bancorp vs. Financial Institutions | Hope Bancorp vs. LINKBANCORP |
| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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