Correlation Between Liberty Northwest and ConnectOne Bancorp
Can any of the company-specific risk be diversified away by investing in both Liberty Northwest and ConnectOne 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 Liberty Northwest and ConnectOne Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Northwest Bancorp and ConnectOne Bancorp, you can compare the effects of market volatilities on Liberty Northwest and ConnectOne 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 Liberty Northwest with a short position of ConnectOne Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Northwest and ConnectOne Bancorp.
Diversification Opportunities for Liberty Northwest and ConnectOne Bancorp
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liberty and ConnectOne is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Northwest Bancorp and ConnectOne Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConnectOne Bancorp and Liberty Northwest 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 Liberty Northwest Bancorp are associated (or correlated) with ConnectOne Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConnectOne Bancorp has no effect on the direction of Liberty Northwest i.e., Liberty Northwest and ConnectOne Bancorp go up and down completely randomly.
Pair Corralation between Liberty Northwest and ConnectOne Bancorp
Given the investment horizon of 90 days Liberty Northwest is expected to generate 185.1 times less return on investment than ConnectOne Bancorp. But when comparing it to its historical volatility, Liberty Northwest Bancorp is 2.26 times less risky than ConnectOne Bancorp. It trades about 0.0 of its potential returns per unit of risk. ConnectOne Bancorp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,545 in ConnectOne Bancorp on September 2, 2024 and sell it today you would earn a total of 1,205 from holding ConnectOne Bancorp or generate 77.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Liberty Northwest Bancorp vs. ConnectOne Bancorp
Performance |
| Timeline |
| Liberty Northwest Bancorp |
| ConnectOne Bancorp |
Liberty Northwest and ConnectOne Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Northwest and ConnectOne Bancorp
The main advantage of trading using opposite Liberty Northwest and ConnectOne Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Northwest position performs unexpectedly, ConnectOne 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 ConnectOne Bancorp will offset losses from the drop in ConnectOne Bancorp's long position.| Liberty Northwest vs. Beyond Meat | Liberty Northwest vs. Uber Technologies | Liberty Northwest vs. Where Food Comes | Liberty Northwest vs. Analog Devices |
| ConnectOne Bancorp vs. Rhinebeck Bancorp | ConnectOne Bancorp vs. Home Bancorp | ConnectOne Bancorp vs. Parke Bancorp | ConnectOne Bancorp vs. Great Southern 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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