Correlation Between Logansport Financial and Community West
Can any of the company-specific risk be diversified away by investing in both Logansport Financial 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 Logansport Financial and Community West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Logansport Financial Corp and Community West Bancshares, you can compare the effects of market volatilities on Logansport Financial 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 Logansport Financial with a short position of Community West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logansport Financial and Community West.
Diversification Opportunities for Logansport Financial and Community West
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Logansport and Community is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Logansport Financial Corp 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 Logansport Financial 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 Logansport Financial Corp 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 Logansport Financial i.e., Logansport Financial and Community West go up and down completely randomly.
Pair Corralation between Logansport Financial and Community West
If you would invest 1,385 in Community West Bancshares on November 2, 2024 and sell it today you would earn a total of 553.50 from holding Community West Bancshares or generate 39.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.2% |
| Values | Daily Returns |
Logansport Financial Corp vs. Community West Bancshares
Performance |
| Timeline |
| Logansport Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Community West Bancshares |
Logansport Financial and Community West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logansport Financial and Community West
The main advantage of trading using opposite Logansport Financial and Community West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logansport Financial 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.The idea behind Logansport Financial Corp and Community West Bancshares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |