Correlation Between Northeast Indiana and FFW

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

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

Diversification Opportunities for Northeast Indiana and FFW

0.0

Correlation Coefficient

Northeast Indiana  FFW

Pay attention - limited upside

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

Pair Corralation between Northeast Indiana and FFW

If you would invest  3,920  in FFW Corporation on December 4, 2024 and sell it today you would earn a total of  80.00  from holding FFW Corporation or generate 2.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Northeast Indiana Bancorp  vs.  FFW Corp.

Northeast Indiana Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Northeast Indiana Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Northeast Indiana is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

FFW Corporation

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FFW Corporation are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, FFW is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Northeast Indiana and FFW

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

The idea behind Northeast Indiana Bancorp and FFW Corporation 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .