Correlation Between Affinity Bancshares and BOC Hong
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and BOC Hong 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 Affinity Bancshares and BOC Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity Bancshares and BOC Hong Kong, you can compare the effects of market volatilities on Affinity Bancshares and BOC Hong 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 Affinity Bancshares with a short position of BOC Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and BOC Hong.
Diversification Opportunities for Affinity Bancshares and BOC Hong
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Affinity and BOC is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and BOC Hong Kong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOC Hong Kong and Affinity 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 Affinity Bancshares are associated (or correlated) with BOC Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOC Hong Kong has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and BOC Hong go up and down completely randomly.
Pair Corralation between Affinity Bancshares and BOC Hong
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 5.72 times less return on investment than BOC Hong. But when comparing it to its historical volatility, Affinity Bancshares is 1.32 times less risky than BOC Hong. It trades about 0.06 of its potential returns per unit of risk. BOC Hong Kong is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 5,418 in BOC Hong Kong on February 15, 2024 and sell it today you would earn a total of 1,038 from holding BOC Hong Kong or generate 19.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 97.62% |
Values | Daily Returns |
Affinity Bancshares vs. BOC Hong Kong
Performance |
Timeline |
Affinity Bancshares |
BOC Hong Kong |
Affinity Bancshares and BOC Hong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Affinity Bancshares and BOC Hong
The main advantage of trading using opposite Affinity Bancshares and BOC Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, BOC Hong 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 BOC Hong will offset losses from the drop in BOC Hong's long position.Affinity Bancshares vs. HMN Financial | Affinity Bancshares vs. Home Federal Bancorp | Affinity Bancshares vs. Magyar Bancorp | Affinity Bancshares vs. Cullman Bancorp |
BOC Hong vs. Banco De Chile | BOC Hong vs. CrossFirst Bankshares | BOC Hong vs. Heritage Commerce Corp | BOC Hong vs. Eastern Bankshares |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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