Correlation Between Northway Financial and Oconee Federal
Can any of the company-specific risk be diversified away by investing in both Northway Financial and Oconee 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 Northway Financial and Oconee Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northway Financial and Oconee Federal Financial, you can compare the effects of market volatilities on Northway Financial and Oconee 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 Northway Financial with a short position of Oconee Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northway Financial and Oconee Federal.
Diversification Opportunities for Northway Financial and Oconee Federal
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northway and Oconee is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Northway Financial and Oconee Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oconee Federal Financial 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 Oconee Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oconee Federal Financial has no effect on the direction of Northway Financial i.e., Northway Financial and Oconee Federal go up and down completely randomly.
Pair Corralation between Northway Financial and Oconee Federal
If you would invest 1,510 in Oconee Federal Financial on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Oconee Federal Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northway Financial vs. Oconee Federal Financial
Performance |
| Timeline |
| Northway Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Oconee Federal Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Northway Financial and Oconee Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northway Financial and Oconee Federal
The main advantage of trading using opposite Northway Financial and Oconee Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northway Financial position performs unexpectedly, Oconee 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 Oconee Federal will offset losses from the drop in Oconee Federal's 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 |
| Oconee Federal vs. Home Federal Bancorp | Oconee Federal vs. Community West Bancshares | Oconee Federal vs. Magyar 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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