Correlation Between International Bancshares and CF Bankshares
Can any of the company-specific risk be diversified away by investing in both International Bancshares and CF Bankshares 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 International Bancshares and CF Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Bancshares and CF Bankshares, you can compare the effects of market volatilities on International Bancshares and CF Bankshares 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 International Bancshares with a short position of CF Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Bancshares and CF Bankshares.
Diversification Opportunities for International Bancshares and CF Bankshares
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between International and CFBK is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding International Bancshares and CF Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Bankshares and International Bancshares 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 International Bancshares are associated (or correlated) with CF Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Bankshares has no effect on the direction of International Bancshares i.e., International Bancshares and CF Bankshares go up and down completely randomly.
Pair Corralation between International Bancshares and CF Bankshares
Given the investment horizon of 90 days International Bancshares is expected to generate 0.97 times more return on investment than CF Bankshares. However, International Bancshares is 1.03 times less risky than CF Bankshares. It trades about 0.09 of its potential returns per unit of risk. CF Bankshares is currently generating about 0.08 per unit of risk. If you would invest 4,402 in International Bancshares on September 12, 2024 and sell it today you would earn a total of 2,761 from holding International Bancshares or generate 62.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.49% |
| Values | Daily Returns |
International Bancshares vs. CF Bankshares
Performance |
| Timeline |
| International Bancshares |
| CF Bankshares |
International Bancshares and CF Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Bancshares and CF Bankshares
The main advantage of trading using opposite International Bancshares and CF Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Bancshares position performs unexpectedly, CF Bankshares 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 CF Bankshares will offset losses from the drop in CF Bankshares' long position.| International Bancshares vs. JPMorgan Chase Co | International Bancshares vs. Citigroup | International Bancshares vs. Wells Fargo | International Bancshares vs. Toronto Dominion Bank |
| CF Bankshares vs. Magyar Bancorp | CF Bankshares vs. Home Federal Bancorp | CF Bankshares vs. Community West Bancshares | CF Bankshares vs. First Financial Northwest |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |