Correlation Between Nmb Financial and Ffbw

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

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

Diversification Opportunities for Nmb Financial and Ffbw

0.41

Correlation Coefficient

Nmb Financial  Ffbw

Very weak diversification

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

Pair Corralation between Nmb Financial and Ffbw

If you would invest  1,026  in Nmb Financial Corp on September 21, 2024 and sell it today you would earn a total of  374.00  from holding Nmb Financial Corp or generate 36.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.18%
Values	Daily Returns

Nmb Financial Corp  vs.  Ffbw Inc

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.

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.

Pair Trading with Nmb Financial and Ffbw

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

The idea behind Nmb Financial Corp and Ffbw Inc 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.