Correlation Between Affinity Bancshares and AmeriServ Financial

Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and AmeriServ 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 Affinity Bancshares and AmeriServ Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Affinity Bancshares and AmeriServ Financial, you can compare the effects of market volatilities on Affinity Bancshares and AmeriServ 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 Affinity Bancshares with a short position of AmeriServ Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and AmeriServ Financial.

Diversification Opportunities for Affinity Bancshares and AmeriServ Financial

0.0

Correlation Coefficient

Affinity Bancshares  AmeriServ Financial

Pay attention - limited upside

The 3 months correlation between Affinity and AmeriServ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and AmeriServ Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmeriServ Financial and Affinity Bancshares 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 Affinity Bancshares are associated (or correlated) with AmeriServ Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmeriServ Financial has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and AmeriServ Financial go up and down completely randomly.

Pair Corralation between Affinity Bancshares and AmeriServ Financial

If you would invest  1,651  in Affinity Bancshares on January 24, 2024 and sell it today you would lose (1.00) from holding Affinity Bancshares or give up 0.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Affinity Bancshares  vs.  AmeriServ Financial

Affinity Bancshares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Affinity Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Affinity Bancshares is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

AmeriServ Financial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Affinity Bancshares and AmeriServ Financial

The main advantage of trading using opposite Affinity Bancshares and AmeriServ Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, AmeriServ 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 AmeriServ Financial will offset losses from the drop in AmeriServ Financial's long position.

The idea behind Affinity Bancshares and AmeriServ Financial 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 the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.