Correlation Between Northfield Bancorp and Rhinebeck Bancorp
Can any of the company-specific risk be diversified away by investing in both Northfield Bancorp and Rhinebeck Bancorp 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 Rhinebeck Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northfield Bancorp and Rhinebeck Bancorp, you can compare the effects of market volatilities on Northfield Bancorp and Rhinebeck Bancorp 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 Rhinebeck Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northfield Bancorp and Rhinebeck Bancorp.
Diversification Opportunities for Northfield Bancorp and Rhinebeck Bancorp
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Northfield and Rhinebeck is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Northfield Bancorp and Rhinebeck Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rhinebeck Bancorp 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 Rhinebeck Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rhinebeck Bancorp has no effect on the direction of Northfield Bancorp i.e., Northfield Bancorp and Rhinebeck Bancorp go up and down completely randomly.
Pair Corralation between Northfield Bancorp and Rhinebeck Bancorp
Given the investment horizon of 90 days Northfield Bancorp is expected to generate 1.38 times less return on investment than Rhinebeck Bancorp. In addition to that, Northfield Bancorp is 1.69 times more volatile than Rhinebeck Bancorp. It trades about 0.08 of its total potential returns per unit of risk. Rhinebeck Bancorp is currently generating about 0.19 per unit of volatility. If you would invest 809.00 in Rhinebeck Bancorp on September 2, 2024 and sell it today you would earn a total of 188.00 from holding Rhinebeck Bancorp or generate 23.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northfield Bancorp vs. Rhinebeck Bancorp
Performance |
| Timeline |
| Northfield Bancorp |
| Rhinebeck Bancorp |
Northfield Bancorp and Rhinebeck Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northfield Bancorp and Rhinebeck Bancorp
The main advantage of trading using opposite Northfield Bancorp and Rhinebeck Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northfield Bancorp position performs unexpectedly, Rhinebeck Bancorp 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 Rhinebeck Bancorp will offset losses from the drop in Rhinebeck Bancorp'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 |
| Rhinebeck Bancorp vs. Home Federal Bancorp | Rhinebeck Bancorp vs. Community West Bancshares | Rhinebeck Bancorp vs. Magyar Bancorp | Rhinebeck Bancorp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |