Correlation Between Norwood Financial and Greenville Federal
Can any of the company-specific risk be diversified away by investing in both Norwood Financial and Greenville Federal 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 Norwood Financial and Greenville Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norwood Financial Corp and Greenville Federal Financial, you can compare the effects of market volatilities on Norwood Financial and Greenville Federal 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 Norwood Financial with a short position of Greenville Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwood Financial and Greenville Federal.
Diversification Opportunities for Norwood Financial and Greenville Federal
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Norwood and Greenville is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Norwood Financial Corp and Greenville Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenville Federal and Norwood Financial 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 Norwood Financial Corp are associated (or correlated) with Greenville Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenville Federal has no effect on the direction of Norwood Financial i.e., Norwood Financial and Greenville Federal go up and down completely randomly.
Pair Corralation between Norwood Financial and Greenville Federal
Given the investment horizon of 90 days Norwood Financial is expected to generate 1.4 times less return on investment than Greenville Federal. But when comparing it to its historical volatility, Norwood Financial Corp is 1.27 times less risky than Greenville Federal. It trades about 0.03 of its potential returns per unit of risk. Greenville Federal Financial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Greenville Federal Financial on September 1, 2024 and sell it today you would earn a total of 125.00 from holding Greenville Federal Financial or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Norwood Financial Corp vs. Greenville Federal Financial
Performance |
| Timeline |
| Norwood Financial Corp |
| Greenville Federal |
Norwood Financial and Greenville Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwood Financial and Greenville Federal
The main advantage of trading using opposite Norwood Financial and Greenville Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwood Financial position performs unexpectedly, Greenville Federal 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 Greenville Federal will offset losses from the drop in Greenville Federal's long position.| Norwood Financial vs. Chemung Financial Corp | Norwood Financial vs. Home Federal Bancorp | Norwood Financial vs. Rhinebeck Bancorp | Norwood Financial vs. Finward Bancorp |
| Greenville Federal vs. First Bankers Trustshares | Greenville Federal vs. First Ottawa Bancshares | Greenville Federal vs. Coastal Carolina Bancshares | Greenville Federal vs. Citizens Bancorp Investment |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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