Correlation Between Coastal Carolina and 1ST SUMMIT
Can any of the company-specific risk be diversified away by investing in both Coastal Carolina and 1ST SUMMIT 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 Coastal Carolina and 1ST SUMMIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coastal Carolina Bancshares and 1ST SUMMIT BANCORP, you can compare the effects of market volatilities on Coastal Carolina and 1ST SUMMIT 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 Coastal Carolina with a short position of 1ST SUMMIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coastal Carolina and 1ST SUMMIT.
Diversification Opportunities for Coastal Carolina and 1ST SUMMIT
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coastal and 1ST is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Carolina Bancshares and 1ST SUMMIT BANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1ST SUMMIT BANCORP and Coastal Carolina 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 Coastal Carolina Bancshares are associated (or correlated) with 1ST SUMMIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1ST SUMMIT BANCORP has no effect on the direction of Coastal Carolina i.e., Coastal Carolina and 1ST SUMMIT go up and down completely randomly.
Pair Corralation between Coastal Carolina and 1ST SUMMIT
Given the investment horizon of 90 days Coastal Carolina Bancshares is expected to generate 2.58 times more return on investment than 1ST SUMMIT. However, Coastal Carolina is 2.58 times more volatile than 1ST SUMMIT BANCORP. It trades about 0.27 of its potential returns per unit of risk. 1ST SUMMIT BANCORP is currently generating about 0.07 per unit of risk. If you would invest 1,000.00 in Coastal Carolina Bancshares on August 29, 2024 and sell it today you would earn a total of 101.00 from holding Coastal Carolina Bancshares or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coastal Carolina Bancshares vs. 1ST SUMMIT BANCORP
Performance |
| Timeline |
| Coastal Carolina Ban |
| 1ST SUMMIT BANCORP |
Coastal Carolina and 1ST SUMMIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coastal Carolina and 1ST SUMMIT
The main advantage of trading using opposite Coastal Carolina and 1ST SUMMIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Carolina position performs unexpectedly, 1ST SUMMIT 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 1ST SUMMIT will offset losses from the drop in 1ST SUMMIT's long position.| Coastal Carolina vs. First Bankers Trustshares | Coastal Carolina vs. Greenville Federal Financial | Coastal Carolina vs. First Ottawa Bancshares | Coastal Carolina vs. Citizens Bancorp Investment |
| 1ST SUMMIT vs. Apollo Bancorp | 1ST SUMMIT vs. Oregon Pacific Bancorp | 1ST SUMMIT vs. The Farmers Bank | 1ST SUMMIT vs. Community Bankers |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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