Correlation Between Community Bank and Salisbury Bancorp
Can any of the company-specific risk be diversified away by investing in both Community Bank and Salisbury 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 Community Bank and Salisbury Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community Bank System and Salisbury Bancorp, you can compare the effects of market volatilities on Community Bank and Salisbury 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 Community Bank with a short position of Salisbury Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community Bank and Salisbury Bancorp.
Diversification Opportunities for Community Bank and Salisbury Bancorp
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Community and Salisbury is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Community Bank System and Salisbury Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salisbury Bancorp and Community Bank 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 Community Bank System are associated (or correlated) with Salisbury Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salisbury Bancorp has no effect on the direction of Community Bank i.e., Community Bank and Salisbury Bancorp go up and down completely randomly.
Pair Corralation between Community Bank and Salisbury Bancorp
If you would invest 6,087 in Community Bank System on August 28, 2024 and sell it today you would earn a total of 919.00 from holding Community Bank System or generate 15.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Community Bank System vs. Salisbury Bancorp
Performance |
| Timeline |
| Community Bank System |
| Salisbury Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Community Bank and Salisbury Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community Bank and Salisbury Bancorp
The main advantage of trading using opposite Community Bank and Salisbury Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community Bank position performs unexpectedly, Salisbury 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 Salisbury Bancorp will offset losses from the drop in Salisbury Bancorp's long position.| Community Bank vs. Fifth Third Bancorp | Community Bank vs. Huntington Bancshares Incorporated | Community Bank vs. MT Bank |
| Salisbury Bancorp vs. Home Federal Bancorp | Salisbury Bancorp vs. First Northwest Bancorp | Salisbury Bancorp vs. National Bank Holdings | Salisbury Bancorp vs. Community Bank System |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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