Correlation Between Bank of Marin and Bar Harbor
Can any of the company-specific risk be diversified away by investing in both Bank of Marin and Bar Harbor 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 Marin and Bar Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Marin and Bar Harbor Bankshares, you can compare the effects of market volatilities on Bank of Marin and Bar Harbor 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 Marin with a short position of Bar Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Marin and Bar Harbor.
Diversification Opportunities for Bank of Marin and Bar Harbor
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Bar is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Marin and Bar Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bar Harbor Bankshares and Bank of Marin 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 Marin are associated (or correlated) with Bar Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bar Harbor Bankshares has no effect on the direction of Bank of Marin i.e., Bank of Marin and Bar Harbor go up and down completely randomly.
Pair Corralation between Bank of Marin and Bar Harbor
Given the investment horizon of 90 days Bank of Marin is expected to generate 0.94 times more return on investment than Bar Harbor. However, Bank of Marin is 1.07 times less risky than Bar Harbor. It trades about 0.21 of its potential returns per unit of risk. Bar Harbor Bankshares is currently generating about 0.12 per unit of risk. If you would invest 2,251 in Bank of Marin on August 28, 2024 and sell it today you would earn a total of 382.00 from holding Bank of Marin or generate 16.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Marin vs. Bar Harbor Bankshares
Performance |
| Timeline |
| Bank of Marin |
| Bar Harbor Bankshares |
Bank of Marin and Bar Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Marin and Bar Harbor
The main advantage of trading using opposite Bank of Marin and Bar Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Marin position performs unexpectedly, Bar Harbor 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 Bar Harbor will offset losses from the drop in Bar Harbor's long position.| Bank of Marin vs. Fifth Third Bancorp | Bank of Marin vs. Zions Bancorporation | Bank of Marin vs. Huntington Bancshares Incorporated | Bank of Marin vs. Comerica |
| Bar Harbor vs. Fifth Third Bancorp | Bar Harbor vs. Zions Bancorporation | Bar Harbor vs. Huntington Bancshares Incorporated | Bar Harbor vs. Comerica |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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