Correlation Between Howard Bancorp and Bank First

By analyzing existing cross correlation between Howard Bancorp MD and Bank First National, you can compare the effects of market volatilities on Howard Bancorp 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 Howard Bancorp with a short position of Bank First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Howard Bancorp and Bank First.

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Can any of the company-specific risk be diversified away by investing in both Howard Bancorp 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 Howard Bancorp and Bank First into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for Howard Bancorp and Bank First

0.49
  Correlation Coefficient
Howard Bancorp MD
Bank First National

Very weak diversification

The 3 months correlation between Howard and Bank First is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Howard Bancorp MD 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 Howard Bancorp 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 Howard Bancorp MD 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 Howard Bancorp i.e., Howard Bancorp and Bank First go up and down completely randomly.

Pair Corralation between Howard Bancorp and Bank First

Given the investment horizon of 90 days Howard Bancorp MD is expected to generate 1.42 times more return on investment than Bank First. However, Howard Bancorp is 1.42 times more volatile than Bank First National. It trades about 0.05 of its potential returns per unit of risk. Bank First National is currently generating about -0.04 per unit of risk. If you would invest  2,245  in Howard Bancorp MD on October 25, 2021 and sell it today you would earn a total of  85.00  from holding Howard Bancorp MD or generate 3.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy97.62%
ValuesDaily Returns

Howard Bancorp MD  vs.  Bank First National

 Performance (%) 
      Timeline 
Howard Bancorp MD 
Howard Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Howard Bancorp MD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Howard Bancorp may actually be approaching a critical reversion point that can send shares even higher in February 2022.

Howard Price Channel

Bank First National 
Bank First Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bank First National are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 and Bank First Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Howard Bancorp and Bank First

The main advantage of trading using opposite Howard Bancorp and Bank First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Howard Bancorp 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.

Howard Bancorp MD

Pair trading matchups for Howard Bancorp

The idea behind Howard Bancorp MD 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.
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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