Correlation Between Guaranty Bancshares, and Affinity Bancshares

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

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

Diversification Opportunities for Guaranty Bancshares, and Affinity Bancshares

0.48

Correlation Coefficient

Guaranty Bancshares,  Affinity Bancshares

Very weak diversification

The 3 months correlation between Guaranty and Affinity is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Bancshares, and Affinity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Bancshares and Guaranty Bancshares, 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 Guaranty Bancshares, 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 Guaranty Bancshares, i.e., Guaranty Bancshares, and Affinity Bancshares go up and down completely randomly.

Pair Corralation between Guaranty Bancshares, and Affinity Bancshares

Given the investment horizon of 90 days Guaranty Bancshares, is expected to generate 2.28 times less return on investment than Affinity Bancshares. In addition to that, Guaranty Bancshares, is 1.29 times more volatile than Affinity Bancshares. It trades about 0.03 of its total potential returns per unit of risk. Affinity Bancshares is currently generating about 0.07 per unit of volatility. If you would invest  1,636  in Affinity Bancshares on September 19, 2024 and sell it today you would earn a total of  533.00  from holding Affinity Bancshares or generate 32.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Guaranty Bancshares,  vs.  Affinity Bancshares

Guaranty Bancshares,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guaranty Bancshares, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Guaranty Bancshares, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Affinity Bancshares

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Affinity Bancshares are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Affinity Bancshares is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Guaranty Bancshares, and Affinity Bancshares

The main advantage of trading using opposite Guaranty Bancshares, and Affinity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guaranty Bancshares, 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.

The idea behind Guaranty Bancshares, and Affinity Bancshares 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.