Correlation Between Bank of Utica and FS Bancorp
Can any of the company-specific risk be diversified away by investing in both Bank of Utica and FS Bancorp 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 FS Bancorp 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 FS Bancorp, you can compare the effects of market volatilities on Bank of Utica and FS Bancorp 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 FS Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Utica and FS Bancorp.
Diversification Opportunities for Bank of Utica and FS Bancorp
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and FXLG is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Utica and FS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS Bancorp 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 FS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Bancorp has no effect on the direction of Bank of Utica i.e., Bank of Utica and FS Bancorp go up and down completely randomly.
Pair Corralation between Bank of Utica and FS Bancorp
Given the investment horizon of 90 days Bank of Utica is expected to generate 1.09 times more return on investment than FS Bancorp. However, Bank of Utica is 1.09 times more volatile than FS Bancorp. It trades about 0.03 of its potential returns per unit of risk. FS Bancorp is currently generating about 0.02 per unit of risk. If you would invest 45,000 in Bank of Utica on November 2, 2024 and sell it today you would earn a total of 6,034 from holding Bank of Utica or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.63% |
| Values | Daily Returns |
Bank of Utica vs. FS Bancorp
Performance |
| Timeline |
| Bank of Utica |
| FS Bancorp |
Bank of Utica and FS Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Utica and FS Bancorp
The main advantage of trading using opposite Bank of Utica and FS Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Utica position performs unexpectedly, FS Bancorp 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 FS Bancorp will offset losses from the drop in FS Bancorp's long position.| Bank of Utica vs. CCSB Financial Corp | Bank of Utica vs. First Community Financial | Bank of Utica vs. BEO Bancorp | Bank of Utica vs. First Community |
| FS Bancorp vs. Eastern Michigan Financial | FS Bancorp vs. Grand River Commerce | FS Bancorp vs. Bank of Botetourt | FS Bancorp vs. AmeriServ Financial |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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