Correlation Between Bank Utica and Auburn Bancorp
Can any of the company-specific risk be diversified away by investing in both Bank Utica and Auburn 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 Utica and Auburn Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Utica Ny and Auburn Bancorp, you can compare the effects of market volatilities on Bank Utica and Auburn 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 Utica with a short position of Auburn Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Utica and Auburn Bancorp.
Diversification Opportunities for Bank Utica and Auburn Bancorp
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Auburn is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank Utica Ny and Auburn Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auburn Bancorp and Bank 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 Utica Ny are associated (or correlated) with Auburn Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auburn Bancorp has no effect on the direction of Bank Utica i.e., Bank Utica and Auburn Bancorp go up and down completely randomly.
Pair Corralation between Bank Utica and Auburn Bancorp
Assuming the 90 days horizon Bank Utica Ny is expected to generate 1.74 times more return on investment than Auburn Bancorp. However, Bank Utica is 1.74 times more volatile than Auburn Bancorp. It trades about 0.21 of its potential returns per unit of risk. Auburn Bancorp is currently generating about -0.07 per unit of risk. If you would invest 43,800 in Bank Utica Ny on August 29, 2024 and sell it today you would earn a total of 3,700 from holding Bank Utica Ny or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Utica Ny vs. Auburn Bancorp
Performance |
| Timeline |
| Bank Utica Ny |
| Auburn Bancorp |
Bank Utica and Auburn Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Utica and Auburn Bancorp
The main advantage of trading using opposite Bank Utica and Auburn Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Utica position performs unexpectedly, Auburn 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 Auburn Bancorp will offset losses from the drop in Auburn Bancorp's long position.The idea behind Bank Utica Ny and Auburn Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Auburn Bancorp vs. Invesco High Income | Auburn Bancorp vs. Blackrock Muniholdings Ny | Auburn Bancorp vs. MFS Investment Grade | Auburn Bancorp vs. Federated Premier Municipal |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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