Correlation Between Ffbw and Nmb Financial

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

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

Diversification Opportunities for Ffbw and Nmb Financial

0.41

Correlation Coefficient

Ffbw  Nmb Financial

Very weak diversification

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

Pair Corralation between Ffbw and Nmb Financial

If you would invest  1,310  in Nmb Financial Corp on September 21, 2024 and sell it today you would earn a total of  90.00  from holding Nmb Financial Corp or generate 6.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Ffbw Inc  vs.  Nmb Financial Corp

Ffbw Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ffbw Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental drivers, Ffbw is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Nmb Financial Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nmb Financial Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, Nmb Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ffbw and Nmb Financial

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

The idea behind Ffbw Inc and Nmb Financial Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.