Correlation Between Inter Co and Community West
Can any of the company-specific risk be diversified away by investing in both Inter Co and Community West 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 Inter Co and Community West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inter Co Class and Community West Bancshares, you can compare the effects of market volatilities on Inter Co and Community West 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 Inter Co with a short position of Community West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Co and Community West.
Diversification Opportunities for Inter Co and Community West
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inter and Community is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Inter Co Class and Community West Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community West Bancshares and Inter Co 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 Inter Co Class are associated (or correlated) with Community West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community West Bancshares has no effect on the direction of Inter Co i.e., Inter Co and Community West go up and down completely randomly.
Pair Corralation between Inter Co and Community West
Given the investment horizon of 90 days Inter Co Class is expected to generate 1.62 times more return on investment than Community West. However, Inter Co is 1.62 times more volatile than Community West Bancshares. It trades about 0.49 of its potential returns per unit of risk. Community West Bancshares is currently generating about 0.08 per unit of risk. If you would invest 411.00 in Inter Co Class on November 3, 2024 and sell it today you would earn a total of 112.00 from holding Inter Co Class or generate 27.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Inter Co Class vs. Community West Bancshares
Performance |
Timeline |
Inter Co Class |
Community West Bancshares |
Inter Co and Community West Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inter Co and Community West
The main advantage of trading using opposite Inter Co and Community West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Co position performs unexpectedly, Community West 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 Community West will offset losses from the drop in Community West's long position.Inter Co vs. Community West Bancshares | Inter Co vs. First Financial Northwest | Inter Co vs. First Northwest Bancorp | Inter Co vs. First Capital |
Community West vs. Home Federal Bancorp | Community West vs. Magyar Bancorp | Community West vs. First Northwest Bancorp | Community West 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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