Correlation Between Commencement Bancorp and Summit Bank
Can any of the company-specific risk be diversified away by investing in both Commencement Bancorp and Summit Bank 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 Commencement Bancorp and Summit Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commencement Bancorp and Summit Bank Group, you can compare the effects of market volatilities on Commencement Bancorp and Summit Bank 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 Commencement Bancorp with a short position of Summit Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commencement Bancorp and Summit Bank.
Diversification Opportunities for Commencement Bancorp and Summit Bank
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Commencement and Summit is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Commencement Bancorp and Summit Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Bank Group and Commencement 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 Commencement Bancorp are associated (or correlated) with Summit Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bank Group has no effect on the direction of Commencement Bancorp i.e., Commencement Bancorp and Summit Bank go up and down completely randomly.
Pair Corralation between Commencement Bancorp and Summit Bank
Given the investment horizon of 90 days Commencement Bancorp is expected to generate 6.18 times less return on investment than Summit Bank. But when comparing it to its historical volatility, Commencement Bancorp is 15.72 times less risky than Summit Bank. It trades about 0.1 of its potential returns per unit of risk. Summit Bank Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,430 in Summit Bank Group on October 10, 2024 and sell it today you would earn a total of 25.00 from holding Summit Bank Group or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commencement Bancorp vs. Summit Bank Group
Performance |
| Timeline |
| Commencement Bancorp |
| Summit Bank Group |
Commencement Bancorp and Summit Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commencement Bancorp and Summit Bank
The main advantage of trading using opposite Commencement Bancorp and Summit Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commencement Bancorp position performs unexpectedly, Summit Bank 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 Summit Bank will offset losses from the drop in Summit Bank's long position.| Commencement Bancorp vs. Summit Bank Group | Commencement Bancorp vs. Pacific West Bancorp | Commencement Bancorp vs. Savi Financial | Commencement Bancorp vs. MNB Holdings Corp |
| Summit Bank vs. Eurobank Ergasias Services | Summit Bank vs. Standard Bank Group | Summit Bank vs. Bank Central Asia | Summit Bank vs. PSB Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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