Correlation Between Northwest Bancshares and Finward Bancorp
Can any of the company-specific risk be diversified away by investing in both Northwest Bancshares and Finward 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 Northwest Bancshares and Finward Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northwest Bancshares and Finward Bancorp, you can compare the effects of market volatilities on Northwest Bancshares and Finward 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 Northwest Bancshares with a short position of Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northwest Bancshares and Finward Bancorp.
Diversification Opportunities for Northwest Bancshares and Finward Bancorp
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Northwest and Finward is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Northwest Bancshares and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp and Northwest Bancshares 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 Northwest Bancshares are associated (or correlated) with Finward Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finward Bancorp has no effect on the direction of Northwest Bancshares i.e., Northwest Bancshares and Finward Bancorp go up and down completely randomly.
Pair Corralation between Northwest Bancshares and Finward Bancorp
Given the investment horizon of 90 days Northwest Bancshares is expected to generate 3.23 times more return on investment than Finward Bancorp. However, Northwest Bancshares is 3.23 times more volatile than Finward Bancorp. It trades about 0.16 of its potential returns per unit of risk. Finward Bancorp is currently generating about -0.04 per unit of risk. If you would invest 1,328 in Northwest Bancshares on August 31, 2024 and sell it today you would earn a total of 152.00 from holding Northwest Bancshares or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northwest Bancshares vs. Finward Bancorp
Performance |
| Timeline |
| Northwest Bancshares |
| Finward Bancorp |
Northwest Bancshares and Finward Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northwest Bancshares and Finward Bancorp
The main advantage of trading using opposite Northwest Bancshares and Finward Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northwest Bancshares position performs unexpectedly, Finward 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 Finward Bancorp will offset losses from the drop in Finward Bancorp's long position.| Northwest Bancshares vs. ST Bancorp | Northwest Bancshares vs. CrossFirst Bankshares | Northwest Bancshares vs. Enterprise Financial Services | Northwest Bancshares vs. The First Bancshares, |
| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward Bancorp vs. Home Federal Bancorp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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