Correlation Between Berkshire Hills and Truxton
Can any of the company-specific risk be diversified away by investing in both Berkshire Hills and Truxton 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 Berkshire Hills and Truxton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hills Bancorp and Truxton, you can compare the effects of market volatilities on Berkshire Hills and Truxton 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 Berkshire Hills with a short position of Truxton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hills and Truxton.
Diversification Opportunities for Berkshire Hills and Truxton
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Berkshire and Truxton is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hills Bancorp and Truxton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truxton and Berkshire Hills 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 Berkshire Hills Bancorp are associated (or correlated) with Truxton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truxton has no effect on the direction of Berkshire Hills i.e., Berkshire Hills and Truxton go up and down completely randomly.
Pair Corralation between Berkshire Hills and Truxton
Given the investment horizon of 90 days Berkshire Hills Bancorp is expected to generate 1.43 times more return on investment than Truxton. However, Berkshire Hills is 1.43 times more volatile than Truxton. It trades about 0.15 of its potential returns per unit of risk. Truxton is currently generating about 0.09 per unit of risk. If you would invest 2,128 in Berkshire Hills Bancorp on September 1, 2024 and sell it today you would earn a total of 920.00 from holding Berkshire Hills Bancorp or generate 43.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hills Bancorp vs. Truxton
Performance |
| Timeline |
| Berkshire Hills Bancorp |
| Truxton |
Berkshire Hills and Truxton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hills and Truxton
The main advantage of trading using opposite Berkshire Hills and Truxton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hills position performs unexpectedly, Truxton 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 Truxton will offset losses from the drop in Truxton's long position.| Berkshire Hills vs. Finward Bancorp | Berkshire Hills vs. Community West Bancshares | Berkshire Hills vs. First Community | Berkshire Hills vs. First Capital |
| Truxton vs. Piraeus Bank SA | Truxton vs. Turkiye Garanti Bankasi | Truxton vs. Delhi Bank Corp | Truxton vs. Uwharrie Capital Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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