Correlation Between Oconee Federal and Affinity Bancshares
Can any of the company-specific risk be diversified away by investing in both Oconee Federal 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 Oconee Federal and Affinity Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oconee Federal Financial and Affinity Bancshares, you can compare the effects of market volatilities on Oconee Federal 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 Oconee Federal with a short position of Affinity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oconee Federal and Affinity Bancshares.
Diversification Opportunities for Oconee Federal and Affinity Bancshares
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oconee and Affinity is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Oconee Federal Financial and Affinity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Bancshares and Oconee Federal 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 Oconee Federal 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 Oconee Federal i.e., Oconee Federal and Affinity Bancshares go up and down completely randomly.
Pair Corralation between Oconee Federal and Affinity Bancshares
Given the investment horizon of 90 days Oconee Federal Financial is expected to under-perform the Affinity Bancshares. In addition to that, Oconee Federal is 1.38 times more volatile than Affinity Bancshares. It trades about -0.13 of its total potential returns per unit of risk. Affinity Bancshares is currently generating about 0.03 per unit of volatility. If you would invest 1,550 in Affinity Bancshares on November 2, 2024 and sell it today you would earn a total of 275.00 from holding Affinity Bancshares or generate 17.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 22.81% |
| Values | Daily Returns |
Oconee Federal Financial vs. Affinity Bancshares
Performance |
| Timeline |
| Oconee Federal Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Affinity Bancshares |
Oconee Federal and Affinity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oconee Federal and Affinity Bancshares
The main advantage of trading using opposite Oconee Federal and Affinity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oconee Federal 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.| Oconee Federal vs. Home Federal Bancorp | Oconee Federal vs. Community West Bancshares | Oconee Federal vs. Magyar Bancorp |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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