Correlation Between New York and CF Bankshares
Can any of the company-specific risk be diversified away by investing in both New York and CF 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 New York and CF Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New York Community and CF Bankshares, you can compare the effects of market volatilities on New York and CF 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 New York with a short position of CF Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and CF Bankshares.
Diversification Opportunities for New York and CF Bankshares
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and CFBK is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding New York Community and CF Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Bankshares and New York 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 New York Community are associated (or correlated) with CF Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Bankshares has no effect on the direction of New York i.e., New York and CF Bankshares go up and down completely randomly.
Pair Corralation between New York and CF Bankshares
Assuming the 90 days trading horizon New York is expected to generate 1.1 times less return on investment than CF Bankshares. In addition to that, New York is 1.2 times more volatile than CF Bankshares. It trades about 0.06 of its total potential returns per unit of risk. CF Bankshares is currently generating about 0.07 per unit of volatility. If you would invest 2,164 in CF Bankshares on August 27, 2024 and sell it today you would earn a total of 574.00 from holding CF Bankshares or generate 26.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.94% |
| Values | Daily Returns |
New York Community vs. CF Bankshares
Performance |
| Timeline |
| New York Community |
| CF Bankshares |
New York and CF Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New York and CF Bankshares
The main advantage of trading using opposite New York and CF Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New York position performs unexpectedly, CF 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 CF Bankshares will offset losses from the drop in CF Bankshares' long position.| New York vs. Wintrust Financial Corp | New York vs. Pinnacle Financial Partners | New York vs. Associated Banc Corp | New York vs. WesBanco |
| CF Bankshares vs. Magyar Bancorp | CF Bankshares vs. Home Federal Bancorp | CF Bankshares vs. Community West Bancshares | CF Bankshares vs. First Financial Northwest |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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