Correlation Between Northfield Bancorp and Commercial National
Can any of the company-specific risk be diversified away by investing in both Northfield Bancorp and Commercial National 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 Commercial National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northfield Bancorp and Commercial National Financial, you can compare the effects of market volatilities on Northfield Bancorp and Commercial National 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 Commercial National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northfield Bancorp and Commercial National.
Diversification Opportunities for Northfield Bancorp and Commercial National
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northfield and Commercial is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Northfield Bancorp and Commercial National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial National 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 Commercial National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial National has no effect on the direction of Northfield Bancorp i.e., Northfield Bancorp and Commercial National go up and down completely randomly.
Pair Corralation between Northfield Bancorp and Commercial National
Given the investment horizon of 90 days Northfield Bancorp is expected to generate 1.34 times less return on investment than Commercial National. In addition to that, Northfield Bancorp is 1.59 times more volatile than Commercial National Financial. It trades about 0.03 of its total potential returns per unit of risk. Commercial National Financial is currently generating about 0.06 per unit of volatility. If you would invest 889.00 in Commercial National Financial on November 8, 2024 and sell it today you would earn a total of 164.00 from holding Commercial National Financial or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 72.47% |
| Values | Daily Returns |
Northfield Bancorp vs. Commercial National Financial
Performance |
| Timeline |
| Northfield Bancorp |
| Commercial National |
Northfield Bancorp and Commercial National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northfield Bancorp and Commercial National
The main advantage of trading using opposite Northfield Bancorp and Commercial National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northfield Bancorp position performs unexpectedly, Commercial National 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 Commercial National will offset losses from the drop in Commercial National'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 |
| Commercial National vs. Eastern Michigan Financial | Commercial National vs. Mifflinburg Bancorp | Commercial National vs. Apollo Bancorp | Commercial National vs. Community Bankers |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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