Correlation Between BCB Bancorp and SHF Holdings
Can any of the company-specific risk be diversified away by investing in both BCB Bancorp and SHF 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 BCB Bancorp and SHF Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCB Bancorp and SHF Holdings, you can compare the effects of market volatilities on BCB Bancorp and SHF 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 BCB Bancorp with a short position of SHF Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCB Bancorp and SHF Holdings.
Diversification Opportunities for BCB Bancorp and SHF Holdings
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between BCB and SHF is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BCB Bancorp and SHF Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHF Holdings and BCB Bancorp 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 BCB Bancorp are associated (or correlated) with SHF Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHF Holdings has no effect on the direction of BCB Bancorp i.e., BCB Bancorp and SHF Holdings go up and down completely randomly.
Pair Corralation between BCB Bancorp and SHF Holdings
Given the investment horizon of 90 days BCB Bancorp is expected to generate 0.21 times more return on investment than SHF Holdings. However, BCB Bancorp is 4.66 times less risky than SHF Holdings. It trades about 0.28 of its potential returns per unit of risk. SHF Holdings is currently generating about -0.09 per unit of risk. If you would invest 1,186 in BCB Bancorp on September 3, 2024 and sell it today you would earn a total of 141.00 from holding BCB Bancorp or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
BCB Bancorp vs. SHF Holdings
Performance |
| Timeline |
| BCB Bancorp |
| SHF Holdings |
BCB Bancorp and SHF Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCB Bancorp and SHF Holdings
The main advantage of trading using opposite BCB Bancorp and SHF Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCB Bancorp position performs unexpectedly, SHF 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 SHF Holdings will offset losses from the drop in SHF Holdings' long position.| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward Bancorp |
| SHF Holdings vs. Harmony Gold Mining | SHF Holdings vs. Avient Corp | SHF Holdings vs. BW Offshore Limited | SHF Holdings vs. Griffon |
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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