Correlation Between William Penn and Finward Bancorp
Can any of the company-specific risk be diversified away by investing in both William Penn and Finward Bancorp 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 William Penn and Finward Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between William Penn Bancorp and Finward Bancorp, you can compare the effects of market volatilities on William Penn and Finward Bancorp 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 William Penn with a short position of Finward Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Penn and Finward Bancorp.
Diversification Opportunities for William Penn and Finward Bancorp
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between William and Finward is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding William Penn Bancorp and Finward Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finward Bancorp and William Penn 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 William Penn Bancorp are associated (or correlated) with Finward Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finward Bancorp has no effect on the direction of William Penn i.e., William Penn and Finward Bancorp go up and down completely randomly.
Pair Corralation between William Penn and Finward Bancorp
Given the investment horizon of 90 days William Penn Bancorp is expected to under-perform the Finward Bancorp. In addition to that, William Penn is 1.6 times more volatile than Finward Bancorp. It trades about -0.18 of its total potential returns per unit of risk. Finward Bancorp is currently generating about 0.1 per unit of volatility. If you would invest 2,657 in Finward Bancorp on December 2, 2024 and sell it today you would earn a total of 42.00 from holding Finward Bancorp or generate 1.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
William Penn Bancorp vs. Finward Bancorp
Performance |
Timeline |
William Penn Bancorp |
Finward Bancorp |
William Penn and Finward Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with William Penn and Finward Bancorp
The main advantage of trading using opposite William Penn and Finward Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Penn position performs unexpectedly, Finward Bancorp 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 Finward Bancorp will offset losses from the drop in Finward Bancorp's long position.William Penn vs. Home Federal Bancorp | William Penn vs. First Financial Northwest | William Penn vs. First Northwest Bancorp | William Penn vs. First Capital |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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