Correlation Between Community West and Keweenaw Financial

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Can any of the company-specific risk be diversified away by investing in both Community West and Keweenaw Financial 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 Community West and Keweenaw Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community West Bancshares and Keweenaw Financial, you can compare the effects of market volatilities on Community West and Keweenaw Financial 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 Community West with a short position of Keweenaw Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community West and Keweenaw Financial.

Diversification Opportunities for Community West and Keweenaw Financial

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Community and Keweenaw is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Community West Bancshares and Keweenaw Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keweenaw Financial and Community West 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 Community West Bancshares are associated (or correlated) with Keweenaw Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keweenaw Financial has no effect on the direction of Community West i.e., Community West and Keweenaw Financial go up and down completely randomly.

Pair Corralation between Community West and Keweenaw Financial

If you would invest  1,359  in Community West Bancshares on October 4, 2024 and sell it today you would earn a total of  555.50  from holding Community West Bancshares or generate 40.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Community West Bancshares  vs.  Keweenaw Financial

 Performance 
       Timeline  
Community West Bancshares 

Risk-Adjusted Performance

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Compared to the overall equity markets, risk-adjusted returns on investments in Community West Bancshares are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental drivers, Community West may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Keweenaw Financial 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Keweenaw Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Keweenaw Financial is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Community West and Keweenaw Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Community West and Keweenaw Financial

The main advantage of trading using opposite Community West and Keweenaw Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community West position performs unexpectedly, Keweenaw Financial 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 Keweenaw Financial will offset losses from the drop in Keweenaw Financial's long position.
The idea behind Community West Bancshares and Keweenaw Financial 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.
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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