Correlation Between Ames National and SWK Holdings
Can any of the company-specific risk be diversified away by investing in both Ames National and SWK Holdings 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 Ames National and SWK Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ames National and SWK Holdings Corp, you can compare the effects of market volatilities on Ames National and SWK Holdings 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 Ames National with a short position of SWK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ames National and SWK Holdings.
Diversification Opportunities for Ames National and SWK Holdings
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ames and SWK is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ames National and SWK Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWK Holdings Corp and Ames National 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 Ames National are associated (or correlated) with SWK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWK Holdings Corp has no effect on the direction of Ames National i.e., Ames National and SWK Holdings go up and down completely randomly.
Pair Corralation between Ames National and SWK Holdings
Given the investment horizon of 90 days Ames National is expected to generate 1.17 times less return on investment than SWK Holdings. But when comparing it to its historical volatility, Ames National is 1.87 times less risky than SWK Holdings. It trades about 0.15 of its potential returns per unit of risk. SWK Holdings Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,499 in SWK Holdings Corp on September 3, 2025 and sell it today you would earn a total of 185.00 from holding SWK Holdings Corp or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ames National vs. SWK Holdings Corp
Performance |
| Timeline |
| Ames National |
| SWK Holdings Corp |
Ames National and SWK Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ames National and SWK Holdings
The main advantage of trading using opposite Ames National and SWK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ames National position performs unexpectedly, SWK Holdings 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 SWK Holdings will offset losses from the drop in SWK Holdings' long position.| Ames National vs. Surf Air Mobility | Ames National vs. Corsair Gaming | Ames National vs. NanoTech Gaming | Ames National vs. GameSquare Holdings |
| SWK Holdings vs. Burlington Stores | SWK Holdings vs. Plaza Retail REIT | SWK Holdings vs. Robinsons Retail Holdings | SWK Holdings vs. Summit Hotel Properties |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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