Correlation Between Colony Bankcorp and Mid Penn
Can any of the company-specific risk be diversified away by investing in both Colony Bankcorp and Mid Penn 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 Mid Penn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colony Bankcorp and Mid Penn Bancorp, you can compare the effects of market volatilities on Colony Bankcorp and Mid Penn 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 Mid Penn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colony Bankcorp and Mid Penn.
Diversification Opportunities for Colony Bankcorp and Mid Penn
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Colony and Mid is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Colony Bankcorp and Mid Penn Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Penn 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 Mid Penn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Penn Bancorp has no effect on the direction of Colony Bankcorp i.e., Colony Bankcorp and Mid Penn go up and down completely randomly.
Pair Corralation between Colony Bankcorp and Mid Penn
Given the investment horizon of 90 days Colony Bankcorp is expected to generate 1.6 times more return on investment than Mid Penn. However, Colony Bankcorp is 1.6 times more volatile than Mid Penn Bancorp. It trades about 0.24 of its potential returns per unit of risk. Mid Penn Bancorp is currently generating about 0.1 per unit of risk. If you would invest 1,573 in Colony Bankcorp on November 18, 2024 and sell it today you would earn a total of 178.00 from holding Colony Bankcorp or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Colony Bankcorp vs. Mid Penn Bancorp
Performance |
| Timeline |
| Colony Bankcorp |
| Mid Penn Bancorp |
Colony Bankcorp and Mid Penn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colony Bankcorp and Mid Penn
The main advantage of trading using opposite Colony Bankcorp and Mid Penn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colony Bankcorp position performs unexpectedly, Mid Penn 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 Mid Penn will offset losses from the drop in Mid Penn's 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 |
| Mid Penn vs. Affinity Bancshares | Mid Penn vs. Home Federal Bancorp | Mid Penn vs. Franklin Financial Services | Mid Penn vs. ACNB Corporation |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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