Correlation Between Northway Financial and Affinity Bancshares
Can any of the company-specific risk be diversified away by investing in both Northway Financial and Affinity Bancshares 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 Northway Financial and Affinity Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northway Financial and Affinity Bancshares, you can compare the effects of market volatilities on Northway Financial and Affinity Bancshares 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 Northway Financial with a short position of Affinity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northway Financial and Affinity Bancshares.
Diversification Opportunities for Northway Financial and Affinity Bancshares
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Northway and Affinity is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Northway Financial and Affinity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Bancshares and Northway 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 Northway Financial are associated (or correlated) with Affinity Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affinity Bancshares has no effect on the direction of Northway Financial i.e., Northway Financial and Affinity Bancshares go up and down completely randomly.
Pair Corralation between Northway Financial and Affinity Bancshares
If you would invest 1,651 in Affinity Bancshares on September 1, 2024 and sell it today you would earn a total of 516.00 from holding Affinity Bancshares or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.54% |
| Values | Daily Returns |
Northway Financial vs. Affinity Bancshares
Performance |
| Timeline |
| Northway Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Affinity Bancshares |
Northway Financial and Affinity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northway Financial and Affinity Bancshares
The main advantage of trading using opposite Northway Financial and Affinity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northway Financial position performs unexpectedly, Affinity Bancshares 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 Affinity Bancshares will offset losses from the drop in Affinity Bancshares' long position.| Northway Financial vs. Katahdin Bankshares Corp | Northway Financial vs. First Northern Community | Northway Financial vs. Pacific Financial Corp | Northway Financial vs. QNB Corp |
| Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares vs. Community West Bancshares |
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
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stocks Directory Find actively traded stocks across global markets |