Correlation Between Bank First and Howard Bancorp

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bank First and Howard 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 Bank First and Howard Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank First National and Howard Bancorp, you can compare the effects of market volatilities on Bank First and Howard 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 Bank First with a short position of Howard Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank First and Howard Bancorp.

Diversification Opportunities for Bank First and Howard Bancorp

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Bank First and Howard is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bank First National and Howard Bancorp Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Howard Bancorp and Bank First 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 Bank First National are associated (or correlated) with Howard Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Howard Bancorp has no effect on the direction of Bank First i.e., Bank First and Howard Bancorp go up and down completely randomly.

Pair Corralation between Bank First and Howard Bancorp

Considering the 90-day investment horizon Bank First is expected to generate 4.58 times less return on investment than Howard Bancorp. But when comparing it to its historical volatility, Bank First National is 1.68 times less risky than Howard Bancorp. It trades about 0.03 of its potential returns per unit of risk. Howard Bancorp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,131  in Howard Bancorp on February 15, 2022 and sell it today you would earn a total of  1,199  from holding Howard Bancorp or generate 106.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy84.4%
ValuesDaily Returns

Bank First National  vs.  Howard Bancorp Inc

 Performance (%) 
      Timeline 
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 current stock price disturbance, may contribute to short-term losses for the investors.

Bank First Price Channel

Howard Bancorp 
Howard Performance
0 of 100
Over the last 90 days Howard Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Howard Bancorp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Bank First and Howard Bancorp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Bank First and Howard Bancorp

The main advantage of trading using opposite Bank First and Howard Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank First position performs unexpectedly, Howard 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 Howard Bancorp will offset losses from the drop in Howard Bancorp's long position.
The idea behind Bank First National and Howard Bancorp 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.
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

Other Complementary Tools

Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go