Correlation Between Dime Community and Flushing Financial
Can any of the company-specific risk be diversified away by investing in both Dime Community and Flushing Financial 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 Dime Community and Flushing Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dime Community Bancshares and Flushing Financial, you can compare the effects of market volatilities on Dime Community and Flushing Financial 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 Dime Community with a short position of Flushing Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dime Community and Flushing Financial.
Diversification Opportunities for Dime Community and Flushing Financial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dime and Flushing is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dime Community Bancshares and Flushing Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flushing Financial and Dime Community 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 Dime Community Bancshares are associated (or correlated) with Flushing Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flushing Financial has no effect on the direction of Dime Community i.e., Dime Community and Flushing Financial go up and down completely randomly.
Pair Corralation between Dime Community and Flushing Financial
Given the investment horizon of 90 days Dime Community Bancshares is expected to generate 1.02 times more return on investment than Flushing Financial. However, Dime Community is 1.02 times more volatile than Flushing Financial. It trades about 0.12 of its potential returns per unit of risk. Flushing Financial is currently generating about 0.08 per unit of risk. If you would invest 1,832 in Dime Community Bancshares on January 25, 2024 and sell it today you would earn a total of 111.00 from holding Dime Community Bancshares or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dime Community Bancshares vs. Flushing Financial
Performance |
| Timeline |
| Dime Community Bancshares |
| Flushing Financial |
Dime Community and Flushing Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dime Community and Flushing Financial
The main advantage of trading using opposite Dime Community and Flushing Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dime Community position performs unexpectedly, Flushing Financial 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 Flushing Financial will offset losses from the drop in Flushing Financial's long position.| Dime Community vs. Cullman Bancorp | Dime Community vs. Home Federal Bancorp | Dime Community vs. First Financial Northwest | Dime Community vs. First Northwest Bancorp |
| Flushing Financial vs. HMN Financial | Flushing Financial vs. Lake Shore Bancorp | Flushing Financial vs. Rhinebeck Bancorp |
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 the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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