Correlation Between Shore Bancshares and IF Bancorp
Can any of the company-specific risk be diversified away by investing in both Shore Bancshares and IF 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 Shore Bancshares and IF Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shore Bancshares and IF Bancorp, you can compare the effects of market volatilities on Shore Bancshares and IF 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 Shore Bancshares with a short position of IF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shore Bancshares and IF Bancorp.
Diversification Opportunities for Shore Bancshares and IF Bancorp
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shore and IROQ is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Shore Bancshares and IF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IF Bancorp and Shore Bancshares 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 Shore Bancshares are associated (or correlated) with IF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IF Bancorp has no effect on the direction of Shore Bancshares i.e., Shore Bancshares and IF Bancorp go up and down completely randomly.
Pair Corralation between Shore Bancshares and IF Bancorp
Given the investment horizon of 90 days Shore Bancshares is expected to generate 1.12 times more return on investment than IF Bancorp. However, Shore Bancshares is 1.12 times more volatile than IF Bancorp. It trades about 0.22 of its potential returns per unit of risk. IF Bancorp is currently generating about -0.06 per unit of risk. If you would invest 1,463 in Shore Bancshares on August 28, 2024 and sell it today you would earn a total of 200.00 from holding Shore Bancshares or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shore Bancshares vs. IF Bancorp
Performance |
| Timeline |
| Shore Bancshares |
| IF Bancorp |
Shore Bancshares and IF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shore Bancshares and IF Bancorp
The main advantage of trading using opposite Shore Bancshares and IF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shore Bancshares position performs unexpectedly, IF 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 IF Bancorp will offset losses from the drop in IF Bancorp's long position.| Shore Bancshares vs. Home Federal Bancorp | Shore Bancshares vs. IF Bancorp | Shore Bancshares vs. Western New England | Shore Bancshares vs. Colony Bankcorp |
| IF Bancorp vs. Home Bancorp | IF Bancorp vs. Commerzbank AG PK | IF Bancorp vs. ConnectOne Bancorp | IF 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |