Correlation Between Brookline Bancorp and ST Bancorp
Can any of the company-specific risk be diversified away by investing in both Brookline Bancorp and ST 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 Brookline Bancorp and ST Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookline Bancorp and ST Bancorp, you can compare the effects of market volatilities on Brookline Bancorp and ST 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 Brookline Bancorp with a short position of ST Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookline Bancorp and ST Bancorp.
Diversification Opportunities for Brookline Bancorp and ST Bancorp
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Brookline and STBA is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Brookline Bancorp and ST Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ST Bancorp and Brookline Bancorp 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 Brookline Bancorp are associated (or correlated) with ST Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ST Bancorp has no effect on the direction of Brookline Bancorp i.e., Brookline Bancorp and ST Bancorp go up and down completely randomly.
Pair Corralation between Brookline Bancorp and ST Bancorp
Given the investment horizon of 90 days Brookline Bancorp is expected to generate 1.13 times less return on investment than ST Bancorp. In addition to that, Brookline Bancorp is 1.02 times more volatile than ST Bancorp. It trades about 0.09 of its total potential returns per unit of risk. ST Bancorp is currently generating about 0.11 per unit of volatility. If you would invest 2,451 in ST Bancorp on August 25, 2024 and sell it today you would earn a total of 1,893 from holding ST Bancorp or generate 77.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookline Bancorp vs. ST Bancorp
Performance |
| Timeline |
| Brookline Bancorp |
| ST Bancorp |
Brookline Bancorp and ST Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookline Bancorp and ST Bancorp
The main advantage of trading using opposite Brookline Bancorp and ST Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookline Bancorp position performs unexpectedly, ST 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 ST Bancorp will offset losses from the drop in ST Bancorp's long position.| Brookline Bancorp vs. Heritage Commerce Corp | Brookline Bancorp vs. Eastern Bankshares | Brookline Bancorp vs. HarborOne Bancorp | Brookline Bancorp vs. Kearny Financial Corp |
| ST Bancorp vs. CrossFirst Bankshares | ST Bancorp vs. Enterprise Financial Services | ST Bancorp vs. The First Bancshares, | ST Bancorp vs. First Bancorp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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