Correlation Between National Bank and First Northwest
Can any of the company-specific risk be diversified away by investing in both National Bank 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 National Bank and First Northwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank Holdings and First Northwest Bancorp, you can compare the effects of market volatilities on National Bank 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 National Bank with a short position of First Northwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and First Northwest.
Diversification Opportunities for National Bank and First Northwest
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between National and First is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding National Bank Holdings 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 National Bank 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 National Bank Holdings 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 National Bank i.e., National Bank and First Northwest go up and down completely randomly.
Pair Corralation between National Bank and First Northwest
Given the investment horizon of 90 days National Bank is expected to generate 1.82 times less return on investment than First Northwest. In addition to that, National Bank is 1.6 times more volatile than First Northwest Bancorp. It trades about 0.09 of its total potential returns per unit of risk. First Northwest Bancorp is currently generating about 0.28 per unit of volatility. If you would invest 998.00 in First Northwest Bancorp on August 30, 2024 and sell it today you would earn a total of 132.00 from holding First Northwest Bancorp or generate 13.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank Holdings vs. First Northwest Bancorp
Performance |
| Timeline |
| National Bank Holdings |
| First Northwest Bancorp |
National Bank and First Northwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and First Northwest
The main advantage of trading using opposite National Bank and First Northwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank 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.| National Bank vs. First Community | National Bank vs. Community West Bancshares | National Bank vs. First Financial Northwest | National Bank vs. First Northwest Bancorp |
| First Northwest vs. Home Federal Bancorp | First Northwest vs. First Financial Northwest | First Northwest vs. First Capital | First Northwest vs. Community West 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stocks Directory Find actively traded stocks across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |