Correlation Between Investar Holding and Franklin Financial
Can any of the company-specific risk be diversified away by investing in both Investar Holding and Franklin 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 Investar Holding and Franklin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investar Holding Corp and Franklin Financial Services, you can compare the effects of market volatilities on Investar Holding and Franklin 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 Investar Holding with a short position of Franklin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investar Holding and Franklin Financial.
Diversification Opportunities for Investar Holding and Franklin Financial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Investar and Franklin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Investar Holding Corp and Franklin Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Financial and Investar Holding 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 Investar Holding Corp are associated (or correlated) with Franklin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Financial has no effect on the direction of Investar Holding i.e., Investar Holding and Franklin Financial go up and down completely randomly.
Pair Corralation between Investar Holding and Franklin Financial
Given the investment horizon of 90 days Investar Holding Corp is expected to generate 1.45 times more return on investment than Franklin Financial. However, Investar Holding is 1.45 times more volatile than Franklin Financial Services. It trades about 0.09 of its potential returns per unit of risk. Franklin Financial Services is currently generating about 0.01 per unit of risk. If you would invest 1,474 in Investar Holding Corp on October 13, 2024 and sell it today you would earn a total of 394.00 from holding Investar Holding Corp or generate 26.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investar Holding Corp vs. Franklin Financial Services
Performance |
| Timeline |
| Investar Holding Corp |
| Franklin Financial |
Investar Holding and Franklin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investar Holding and Franklin Financial
The main advantage of trading using opposite Investar Holding and Franklin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investar Holding position performs unexpectedly, Franklin 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 Franklin Financial will offset losses from the drop in Franklin Financial's long position.| Investar Holding vs. Magyar Bancorp | Investar Holding vs. Home Federal Bancorp | Investar Holding vs. Community West Bancshares | Investar Holding vs. First Northwest Bancorp |
| Franklin Financial vs. Magyar Bancorp | Franklin Financial vs. Affinity Bancshares | Franklin Financial vs. Home Federal Bancorp | Franklin Financial vs. Sound Financial 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |