Correlation Between Northeast Bancorp and Triumph Financial
Can any of the company-specific risk be diversified away by investing in both Northeast Bancorp and Triumph 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 Northeast Bancorp and Triumph Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northeast Bancorp and Triumph Financial, you can compare the effects of market volatilities on Northeast Bancorp and Triumph 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 Northeast Bancorp with a short position of Triumph Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northeast Bancorp and Triumph Financial.
Diversification Opportunities for Northeast Bancorp and Triumph Financial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Northeast and Triumph is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Northeast Bancorp and Triumph Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Financial and Northeast Bancorp 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 Northeast Bancorp are associated (or correlated) with Triumph Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Financial has no effect on the direction of Northeast Bancorp i.e., Northeast Bancorp and Triumph Financial go up and down completely randomly.
Pair Corralation between Northeast Bancorp and Triumph Financial
Considering the 90-day investment horizon Northeast Bancorp is expected to generate 0.89 times more return on investment than Triumph Financial. However, Northeast Bancorp is 1.13 times less risky than Triumph Financial. It trades about 0.13 of its potential returns per unit of risk. Triumph Financial is currently generating about 0.06 per unit of risk. If you would invest 5,102 in Northeast Bancorp on September 14, 2024 and sell it today you would earn a total of 4,748 from holding Northeast Bancorp or generate 93.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northeast Bancorp vs. Triumph Financial
Performance |
| Timeline |
| Northeast Bancorp |
| Triumph Financial |
Northeast Bancorp and Triumph Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northeast Bancorp and Triumph Financial
The main advantage of trading using opposite Northeast Bancorp and Triumph Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northeast Bancorp position performs unexpectedly, Triumph 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 Triumph Financial will offset losses from the drop in Triumph Financial's long position.| Northeast Bancorp vs. Home Federal Bancorp | Northeast Bancorp vs. Mainstreet Bank | Northeast Bancorp vs. Investar Holding Corp | Northeast Bancorp vs. Magyar Bancorp |
| Triumph Financial vs. First Capital | Triumph Financial vs. Finward Bancorp | Triumph Financial vs. Community West Bancshares | Triumph Financial vs. QCR Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |