Correlation Between Bank of Utica and Community Bankers
Can any of the company-specific risk be diversified away by investing in both Bank of Utica and Community Bankers 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 Bank of Utica and Community Bankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Utica and Community Bankers, you can compare the effects of market volatilities on Bank of Utica and Community Bankers 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 Bank of Utica with a short position of Community Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Utica and Community Bankers.
Diversification Opportunities for Bank of Utica and Community Bankers
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Community is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Utica and Community Bankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Bankers and Bank of Utica 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 Bank of Utica are associated (or correlated) with Community Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Bankers has no effect on the direction of Bank of Utica i.e., Bank of Utica and Community Bankers go up and down completely randomly.
Pair Corralation between Bank of Utica and Community Bankers
Given the investment horizon of 90 days Bank of Utica is expected to generate 1.11 times less return on investment than Community Bankers. But when comparing it to its historical volatility, Bank of Utica is 1.8 times less risky than Community Bankers. It trades about 0.17 of its potential returns per unit of risk. Community Bankers is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 420.00 in Community Bankers on August 25, 2024 and sell it today you would earn a total of 59.00 from holding Community Bankers or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Utica vs. Community Bankers
Performance |
| Timeline |
| Bank of Utica |
| Community Bankers |
Bank of Utica and Community Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Utica and Community Bankers
The main advantage of trading using opposite Bank of Utica and Community Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Utica position performs unexpectedly, Community Bankers 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 Community Bankers will offset losses from the drop in Community Bankers' long position.| Bank of Utica vs. Standard Bank Group | Bank of Utica vs. PSB Holdings | Bank of Utica vs. United Overseas Bank | Bank of Utica vs. Turkiye Garanti Bankasi |
| Community Bankers vs. The Farmers Bank | Community Bankers vs. CCSB Financial Corp | Community Bankers vs. Bank of Utica | Community Bankers vs. Delhi Bank 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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