Correlation Between Arrow Financial and Bar Harbor

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

Diversification Opportunities for Arrow Financial and Bar Harbor

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Arrow and Bar Harbor is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Financial Corp and Bar Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bar Harbor Bankshares and Arrow 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 Arrow Financial Corp are associated (or correlated) with Bar Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bar Harbor Bankshares has no effect on the direction of Arrow Financial i.e., Arrow Financial and Bar Harbor go up and down completely randomly.

Pair Corralation between Arrow Financial and Bar Harbor

Given the investment horizon of 90 days Arrow Financial Corp is expected to generate 0.64 times more return on investment than Bar Harbor. However, Arrow Financial Corp is 1.56 times less risky than Bar Harbor. It trades about -0.12 of its potential returns per unit of risk. Bar Harbor Bankshares is currently generating about -0.08 per unit of risk. If you would invest  3,184  in Arrow Financial Corp on June 28, 2022 and sell it today you would lose (112.00)  from holding Arrow Financial Corp or give up 3.52% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Arrow Financial Corp  vs.  Bar Harbor Bankshares

 Performance (%) 
       Timeline  
Arrow Financial Corp 
Arrow Performance
0 of 100
Over the last 90 days Arrow Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Arrow Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Arrow Price Channel

Bar Harbor Bankshares 
Bar Harbor Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bar Harbor Bankshares are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, Bar Harbor is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bar Harbor Price Channel

Arrow Financial and Bar Harbor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Arrow Financial and Bar Harbor

The main advantage of trading using opposite Arrow Financial and Bar Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Financial position performs unexpectedly, Bar Harbor 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 Bar Harbor will offset losses from the drop in Bar Harbor's long position.
Arrow Financial vs. Kibush Capital Corp
The idea behind Arrow Financial Corp and Bar Harbor Bankshares 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.
Bar Harbor vs. Kibush Capital Corp
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 Piotroski F Score module to get Piotroski F Score based on binary analysis strategy of nine different fundamentals.

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