Correlation Between Tectonic Financial and Affinity Bancshares
Can any of the company-specific risk be diversified away by investing in both Tectonic Financial 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 Tectonic Financial and Affinity Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tectonic Financial PR and Affinity Bancshares, you can compare the effects of market volatilities on Tectonic Financial 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 Tectonic Financial with a short position of Affinity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and Affinity Bancshares.
Diversification Opportunities for Tectonic Financial and Affinity Bancshares
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tectonic and Affinity is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR and Affinity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Bancshares and Tectonic Financial 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 Tectonic Financial PR 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 Tectonic Financial i.e., Tectonic Financial and Affinity Bancshares go up and down completely randomly.
Pair Corralation between Tectonic Financial and Affinity Bancshares
Assuming the 90 days horizon Tectonic Financial is expected to generate 2.12 times less return on investment than Affinity Bancshares. In addition to that, Tectonic Financial is 1.0 times more volatile than Affinity Bancshares. It trades about 0.11 of its total potential returns per unit of risk. Affinity Bancshares is currently generating about 0.23 per unit of volatility. If you would invest 1,750 in Affinity Bancshares on November 1, 2024 and sell it today you would earn a total of 90.00 from holding Affinity Bancshares or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Tectonic Financial PR vs. Affinity Bancshares
Performance |
| Timeline |
| Tectonic Financial |
| Affinity Bancshares |
Tectonic Financial and Affinity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tectonic Financial and Affinity Bancshares
The main advantage of trading using opposite Tectonic Financial and Affinity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic Financial 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.| Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Bridgewater Bancshares Depositary |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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