Correlation Between NYSE Composite and CrossFirst Bankshares
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and CrossFirst Bankshares 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 NYSE Composite and CrossFirst Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and CrossFirst Bankshares, you can compare the effects of market volatilities on NYSE Composite and CrossFirst Bankshares 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 NYSE Composite with a short position of CrossFirst Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and CrossFirst Bankshares.
Diversification Opportunities for NYSE Composite and CrossFirst Bankshares
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and CrossFirst is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares and NYSE Composite 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 NYSE Composite are associated (or correlated) with CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of NYSE Composite i.e., NYSE Composite and CrossFirst Bankshares go up and down completely randomly.
Pair Corralation between NYSE Composite and CrossFirst Bankshares
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.33 times less return on investment than CrossFirst Bankshares. But when comparing it to its historical volatility, NYSE Composite is 5.28 times less risky than CrossFirst Bankshares. It trades about 0.29 of its potential returns per unit of risk. CrossFirst Bankshares is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,617 in CrossFirst Bankshares on August 31, 2024 and sell it today you would earn a total of 140.00 from holding CrossFirst Bankshares or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. CrossFirst Bankshares
Performance |
| Timeline |
NYSE Composite and CrossFirst Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
CrossFirst Bankshares
Pair trading matchups for CrossFirst Bankshares
Pair Trading with NYSE Composite and CrossFirst Bankshares
The main advantage of trading using opposite NYSE Composite and CrossFirst Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, CrossFirst Bankshares 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 CrossFirst Bankshares will offset losses from the drop in CrossFirst Bankshares' long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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