Correlation Between Colony Bankcorp and Berkshire Hills
Can any of the company-specific risk be diversified away by investing in both Colony Bankcorp and Berkshire Hills 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 Colony Bankcorp and Berkshire Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colony Bankcorp and Berkshire Hills Bancorp, you can compare the effects of market volatilities on Colony Bankcorp and Berkshire Hills 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 Colony Bankcorp with a short position of Berkshire Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colony Bankcorp and Berkshire Hills.
Diversification Opportunities for Colony Bankcorp and Berkshire Hills
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Colony and Berkshire is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Colony Bankcorp and Berkshire Hills Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hills Bancorp and Colony Bankcorp 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 Colony Bankcorp are associated (or correlated) with Berkshire Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hills Bancorp has no effect on the direction of Colony Bankcorp i.e., Colony Bankcorp and Berkshire Hills go up and down completely randomly.
Pair Corralation between Colony Bankcorp and Berkshire Hills
Given the investment horizon of 90 days Colony Bankcorp is expected to generate 0.91 times more return on investment than Berkshire Hills. However, Colony Bankcorp is 1.1 times less risky than Berkshire Hills. It trades about 0.11 of its potential returns per unit of risk. Berkshire Hills Bancorp is currently generating about 0.07 per unit of risk. If you would invest 993.00 in Colony Bankcorp on September 12, 2024 and sell it today you would earn a total of 779.50 from holding Colony Bankcorp or generate 78.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Colony Bankcorp vs. Berkshire Hills Bancorp
Performance |
| Timeline |
| Colony Bankcorp |
| Berkshire Hills Bancorp |
Colony Bankcorp and Berkshire Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colony Bankcorp and Berkshire Hills
The main advantage of trading using opposite Colony Bankcorp and Berkshire Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colony Bankcorp position performs unexpectedly, Berkshire Hills 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 Berkshire Hills will offset losses from the drop in Berkshire Hills' long position.| Colony Bankcorp vs. Home Federal Bancorp | Colony Bankcorp vs. First Financial Northwest | Colony Bankcorp vs. First Northwest Bancorp | Colony Bankcorp vs. First Capital |
| Berkshire Hills vs. Finward Bancorp | Berkshire Hills vs. Community West Bancshares | Berkshire Hills vs. First Community | Berkshire Hills vs. First Capital |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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