Correlation Between AMB Financial and High Country

Can any of the company-specific risk be diversified away by investing in both AMB Financial and High Country 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 AMB Financial and High Country into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMB Financial Corp and High Country Bancorp, you can compare the effects of market volatilities on AMB Financial and High Country 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 AMB Financial with a short position of High Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMB Financial and High Country.

Diversification Opportunities for AMB Financial and High Country

-0.41

Correlation Coefficient

AMB Financial  High Country

Very good diversification

The 3 months correlation between AMB and High is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding AMB Financial Corp and High Country Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Country Bancorp and AMB 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 AMB Financial Corp are associated (or correlated) with High Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Country Bancorp has no effect on the direction of AMB Financial i.e., AMB Financial and High Country go up and down completely randomly.

Pair Corralation between AMB Financial and High Country

Given the investment horizon of 90 days AMB Financial Corp is expected to under-perform the High Country. But the pink sheet apears to be less risky and, when comparing its historical volatility, AMB Financial Corp is 2.25 times less risky than High Country. The pink sheet trades about -0.01 of its potential returns per unit of risk. The High Country Bancorp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,800  in High Country Bancorp on September 20, 2024 and sell it today you would earn a total of  0.00  from holding High Country Bancorp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	20.57%
Values	Daily Returns

AMB Financial Corp  vs.  High Country Bancorp

AMB Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMB Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, AMB Financial is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

High Country Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Country Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, High Country is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AMB Financial and High Country

The main advantage of trading using opposite AMB Financial and High Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMB Financial position performs unexpectedly, High Country 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 High Country will offset losses from the drop in High Country's long position.

The idea behind AMB Financial Corp and High Country Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..