Correlation Between Vmware and Bank First

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

Diversification Opportunities for Vmware and Bank First

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Vmware and Bank First is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vmware Inc 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 Vmware 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 Vmware Inc 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 Vmware i.e., Vmware and Bank First go up and down completely randomly.

Pair Corralation between Vmware and Bank First

Considering the 90-day investment horizon Vmware Inc is expected to generate 0.76 times more return on investment than Bank First. However, Vmware Inc is 1.32 times less risky than Bank First. It trades about 0.41 of its potential returns per unit of risk. Bank First National is currently generating about 0.08 per unit of risk. If you would invest  11,062  in Vmware Inc on May 16, 2022 and sell it today you would earn a total of  1,134  from holding Vmware Inc or generate 10.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Vmware Inc  vs.  Bank First National

 Performance (%) 
       Timeline  
Vmware Inc 
Vmware Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Vmware Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady primary indicators, Vmware showed solid returns over the last few months and may actually be approaching a breakup point.

Vmware Price Channel

Bank First National 
Bank First Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bank First National are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Bank First sustained solid returns over the last few months and may actually be approaching a breakup point.

Bank First Price Channel

Vmware and Bank First Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vmware and Bank First

The main advantage of trading using opposite Vmware and Bank First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vmware 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.
The idea behind Vmware Inc 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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