Correlation Between Northfield Bancorp and Banco De
Can any of the company-specific risk be diversified away by investing in both Northfield Bancorp and Banco De 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 Northfield Bancorp and Banco De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northfield Bancorp and Banco De Chile, you can compare the effects of market volatilities on Northfield Bancorp and Banco De 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 Northfield Bancorp with a short position of Banco De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northfield Bancorp and Banco De.
Diversification Opportunities for Northfield Bancorp and Banco De
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northfield and Banco is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Northfield Bancorp and Banco De Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco De Chile and Northfield 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 Northfield Bancorp are associated (or correlated) with Banco De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco De Chile has no effect on the direction of Northfield Bancorp i.e., Northfield Bancorp and Banco De go up and down completely randomly.
Pair Corralation between Northfield Bancorp and Banco De
Given the investment horizon of 90 days Northfield Bancorp is expected to generate 3.28 times more return on investment than Banco De. However, Northfield Bancorp is 3.28 times more volatile than Banco De Chile. It trades about 0.19 of its potential returns per unit of risk. Banco De Chile is currently generating about -0.26 per unit of risk. If you would invest 1,186 in Northfield Bancorp on August 27, 2024 and sell it today you would earn a total of 192.00 from holding Northfield Bancorp or generate 16.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northfield Bancorp vs. Banco De Chile
Performance |
| Timeline |
| Northfield Bancorp |
| Banco De Chile |
Northfield Bancorp and Banco De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northfield Bancorp and Banco De
The main advantage of trading using opposite Northfield Bancorp and Banco De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northfield Bancorp position performs unexpectedly, Banco De 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 Banco De will offset losses from the drop in Banco De's long position.| Northfield Bancorp vs. Finward Bancorp | Northfield Bancorp vs. Community West Bancshares | Northfield Bancorp vs. First Financial Northwest | Northfield Bancorp vs. Home Bancorp |
| Banco De vs. Banco Santander Brasil | Banco De vs. CrossFirst Bankshares | Banco De vs. Banco Bradesco SA | Banco De vs. CF Bankshares |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| 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 | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |