Correlation Between OFG Bancorp and Finward Bancorp
Can any of the company-specific risk be diversified away by investing in both OFG Bancorp and Finward Bancorp 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 OFG Bancorp and Finward Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OFG Bancorp and Finward Bancorp, you can compare the effects of market volatilities on OFG Bancorp and Finward Bancorp 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 OFG Bancorp with a short position of Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFG Bancorp and Finward Bancorp.
Diversification Opportunities for OFG Bancorp and Finward Bancorp
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OFG and Finward is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding OFG Bancorp and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp and OFG Bancorp 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 OFG Bancorp are associated (or correlated) with Finward Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finward Bancorp has no effect on the direction of OFG Bancorp i.e., OFG Bancorp and Finward Bancorp go up and down completely randomly.
Pair Corralation between OFG Bancorp and Finward Bancorp
Considering the 90-day investment horizon OFG Bancorp is expected to generate 1.29 times less return on investment than Finward Bancorp. In addition to that, OFG Bancorp is 1.42 times more volatile than Finward Bancorp. It trades about 0.08 of its total potential returns per unit of risk. Finward Bancorp is currently generating about 0.14 per unit of volatility. If you would invest 2,003 in Finward Bancorp on August 24, 2024 and sell it today you would earn a total of 1,097 from holding Finward Bancorp or generate 54.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OFG Bancorp vs. Finward Bancorp
Performance |
| Timeline |
| OFG Bancorp |
| Finward Bancorp |
OFG Bancorp and Finward Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFG Bancorp and Finward Bancorp
The main advantage of trading using opposite OFG Bancorp and Finward Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFG Bancorp position performs unexpectedly, Finward Bancorp 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 Finward Bancorp will offset losses from the drop in Finward Bancorp's long position.| OFG Bancorp vs. Popular | OFG Bancorp vs. The First Bancshares, | OFG Bancorp vs. First Commonwealth Financial | OFG Bancorp vs. First Bancorp |
| Finward Bancorp vs. Community West Bancshares | Finward Bancorp vs. First Financial Northwest | Finward Bancorp vs. Oak Valley Bancorp | Finward Bancorp vs. Home Federal 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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