Correlation Between Ottawa Savings and First Northwest
Can any of the company-specific risk be diversified away by investing in both Ottawa Savings and First Northwest 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 Ottawa Savings and First Northwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ottawa Savings Bancorp and First Northwest Bancorp, you can compare the effects of market volatilities on Ottawa Savings and First Northwest 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 Ottawa Savings with a short position of First Northwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ottawa Savings and First Northwest.
Diversification Opportunities for Ottawa Savings and First Northwest
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ottawa and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ottawa Savings Bancorp and First Northwest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Northwest Bancorp and Ottawa Savings 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 Ottawa Savings Bancorp are associated (or correlated) with First Northwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Northwest Bancorp has no effect on the direction of Ottawa Savings i.e., Ottawa Savings and First Northwest go up and down completely randomly.
Pair Corralation between Ottawa Savings and First Northwest
If you would invest 998.00 in First Northwest Bancorp on August 30, 2024 and sell it today you would earn a total of 132.00 from holding First Northwest Bancorp or generate 13.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Ottawa Savings Bancorp vs. First Northwest Bancorp
Performance |
| Timeline |
| Ottawa Savings Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Northwest Bancorp |
Ottawa Savings and First Northwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ottawa Savings and First Northwest
The main advantage of trading using opposite Ottawa Savings and First Northwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ottawa Savings position performs unexpectedly, First Northwest 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 First Northwest will offset losses from the drop in First Northwest's long position.| Ottawa Savings vs. Lake Shore Bancorp | Ottawa Savings vs. IF Bancorp | Ottawa Savings vs. Home Federal Bancorp |
| First Northwest vs. Home Federal Bancorp | First Northwest vs. First Financial Northwest | First Northwest vs. First Capital | First Northwest 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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