Correlation Between 1st Source and Affinity Bancshares
Can any of the company-specific risk be diversified away by investing in both 1st Source 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 1st Source and Affinity Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1st Source and Affinity Bancshares, you can compare the effects of market volatilities on 1st Source 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 1st Source with a short position of Affinity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1st Source and Affinity Bancshares.
Diversification Opportunities for 1st Source and Affinity Bancshares
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between 1st and Affinity is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding 1st Source and Affinity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Bancshares and 1st Source 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 1st Source 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 1st Source i.e., 1st Source and Affinity Bancshares go up and down completely randomly.
Pair Corralation between 1st Source and Affinity Bancshares
Given the investment horizon of 90 days 1st Source is expected to generate 3.73 times more return on investment than Affinity Bancshares. However, 1st Source is 3.73 times more volatile than Affinity Bancshares. It trades about 0.13 of its potential returns per unit of risk. Affinity Bancshares is currently generating about 0.06 per unit of risk. If you would invest 6,019 in 1st Source on August 30, 2024 and sell it today you would earn a total of 470.00 from holding 1st Source or generate 7.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1st Source vs. Affinity Bancshares
Performance |
| Timeline |
| 1st Source |
| Affinity Bancshares |
1st Source and Affinity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1st Source and Affinity Bancshares
The main advantage of trading using opposite 1st Source and Affinity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1st Source 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.| 1st Source vs. Penns Woods Bancorp | 1st Source vs. Great Southern Bancorp | 1st Source vs. Waterstone Financial | 1st Source vs. Chemung Financial Corp |
| Affinity Bancshares vs. SVB T Corp | Affinity Bancshares vs. First Capital | Affinity Bancshares vs. Pioneer Bankcorp | Affinity Bancshares vs. Liberty Northwest 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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