Correlation Between Allovir and Bank First

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Can any of the company-specific risk be diversified away by investing in both Allovir and Bank First 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 Allovir and Bank First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allovir and Bank First National, you can compare the effects of market volatilities on Allovir and Bank First 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 Allovir with a short position of Bank First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allovir and Bank First.

Diversification Opportunities for Allovir and Bank First

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Allovir and Bank First is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Allovir and Bank First National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank First National and Allovir 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 Allovir are associated (or correlated) with Bank First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank First National has no effect on the direction of Allovir i.e., Allovir and Bank First go up and down completely randomly.

Pair Corralation between Allovir and Bank First

Given the investment horizon of 90 days Allovir is expected to generate 3.52 times more return on investment than Bank First. However, Allovir is 3.52 times more volatile than Bank First National. It trades about 0.11 of its potential returns per unit of risk. Bank First National is currently generating about -0.03 per unit of risk. If you would invest  726.00  in Allovir on July 5, 2022 and sell it today you would earn a total of  63.00  from holding Allovir or generate 8.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Allovir  vs.  Bank First National

 Performance (%) 
       Timeline  
Allovir 
Allovir Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Allovir are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Allovir reported solid returns over the last few months and may actually be approaching a breakup point.

Allovir Price Channel

Bank First National 
Bank First Performance
0 of 100
Over the last 90 days Bank First National has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Bank First is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bank First Price Channel

Allovir and Bank First Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Allovir and Bank First

The main advantage of trading using opposite Allovir and Bank First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allovir position performs unexpectedly, Bank First 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 Bank First will offset losses from the drop in Bank First's long position.
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The idea behind Allovir and Bank First National 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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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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