Correlation Between First Niles and AMB Financial

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

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

Diversification Opportunities for First Niles and AMB Financial

0.07

Correlation Coefficient

First Niles  AMB Financial

Significant diversification

The 3 months correlation between First and AMB is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding First Niles Financial and AMB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMB Financial Corp and First Niles 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 First Niles Financial are associated (or correlated) with AMB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMB Financial Corp has no effect on the direction of First Niles i.e., First Niles and AMB Financial go up and down completely randomly.

Pair Corralation between First Niles and AMB Financial

If you would invest  2,005  in AMB Financial Corp on September 20, 2024 and sell it today you would earn a total of  0.00  from holding AMB Financial Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

First Niles Financial  vs.  AMB Financial Corp

First Niles Financial

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with First Niles and AMB Financial

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

The idea behind First Niles Financial and AMB 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.