Correlation Between LINKBANCORP and First Northwest
Can any of the company-specific risk be diversified away by investing in both LINKBANCORP and First Northwest 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 LINKBANCORP and First Northwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LINKBANCORP and First Northwest Bancorp, you can compare the effects of market volatilities on LINKBANCORP and First Northwest 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 LINKBANCORP with a short position of First Northwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of LINKBANCORP and First Northwest.
Diversification Opportunities for LINKBANCORP and First Northwest
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LINKBANCORP and First is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding LINKBANCORP and First Northwest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Northwest Bancorp and LINKBANCORP 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 LINKBANCORP are associated (or correlated) with First Northwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Northwest Bancorp has no effect on the direction of LINKBANCORP i.e., LINKBANCORP and First Northwest go up and down completely randomly.
Pair Corralation between LINKBANCORP and First Northwest
Given the investment horizon of 90 days LINKBANCORP is expected to generate 1.0 times more return on investment than First Northwest. However, LINKBANCORP is 1.0 times less risky than First Northwest. It trades about 0.09 of its potential returns per unit of risk. First Northwest Bancorp is currently generating about -0.03 per unit of risk. If you would invest 608.00 in LINKBANCORP on November 2, 2024 and sell it today you would earn a total of 104.00 from holding LINKBANCORP or generate 17.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LINKBANCORP vs. First Northwest Bancorp
Performance |
| Timeline |
| LINKBANCORP |
| First Northwest Bancorp |
LINKBANCORP and First Northwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LINKBANCORP and First Northwest
The main advantage of trading using opposite LINKBANCORP and First Northwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LINKBANCORP position performs unexpectedly, First Northwest 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 First Northwest will offset losses from the drop in First Northwest's long position.| LINKBANCORP vs. Home Federal Bancorp | LINKBANCORP vs. Lake Shore Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP vs. Magyar Bancorp |
| First Northwest vs. Home Federal Bancorp | First Northwest vs. Magyar Bancorp | First Northwest vs. First Capital | First Northwest vs. HomeTrust Bancshares |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |