Correlation Between Postal Savings and Berkshire Hills
Can any of the company-specific risk be diversified away by investing in both Postal Savings and Berkshire Hills 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 Postal Savings and Berkshire Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Savings Bank and Berkshire Hills Bancorp, you can compare the effects of market volatilities on Postal Savings and Berkshire Hills 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 Postal Savings with a short position of Berkshire Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and Berkshire Hills.
Diversification Opportunities for Postal Savings and Berkshire Hills
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Postal and Berkshire is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and Berkshire Hills Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hills Bancorp and Postal Savings 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 Postal Savings Bank are associated (or correlated) with Berkshire Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hills Bancorp has no effect on the direction of Postal Savings i.e., Postal Savings and Berkshire Hills go up and down completely randomly.
Pair Corralation between Postal Savings and Berkshire Hills
Assuming the 90 days horizon Postal Savings Bank is expected to under-perform the Berkshire Hills. But the stock apears to be less risky and, when comparing its historical volatility, Postal Savings Bank is 2.44 times less risky than Berkshire Hills. The stock trades about -0.15 of its potential returns per unit of risk. The Berkshire Hills Bancorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,802 in Berkshire Hills Bancorp on September 12, 2024 and sell it today you would earn a total of 78.00 from holding Berkshire Hills Bancorp or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. Berkshire Hills Bancorp
Performance |
| Timeline |
| Postal Savings Bank |
| Berkshire Hills Bancorp |
Postal Savings and Berkshire Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and Berkshire Hills
The main advantage of trading using opposite Postal Savings and Berkshire Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings position performs unexpectedly, Berkshire Hills 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 Berkshire Hills will offset losses from the drop in Berkshire Hills' long position.| Postal Savings vs. POSBO UNSPADRS20YC1 | Postal Savings vs. UTD OV BK LOC ADR1 | Postal Savings vs. Superior Plus Corp | Postal Savings vs. SIVERS SEMICONDUCTORS AB |
| Berkshire Hills vs. ACCSYS TECHPLC EO | Berkshire Hills vs. PKSHA TECHNOLOGY INC | Berkshire Hills vs. Dalata Hotel Group | Berkshire Hills vs. Hyatt Hotels |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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