Correlation Between CIB Marine and Victory Bancorp
Can any of the company-specific risk be diversified away by investing in both CIB Marine and Victory 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 CIB Marine and Victory Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIB Marine Bancshares and The Victory Bancorp, you can compare the effects of market volatilities on CIB Marine and Victory 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 CIB Marine with a short position of Victory Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIB Marine and Victory Bancorp.
Diversification Opportunities for CIB Marine and Victory Bancorp
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CIB and Victory is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CIB Marine Bancshares and The Victory Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Bancorp and CIB Marine 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 CIB Marine Bancshares are associated (or correlated) with Victory Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Bancorp has no effect on the direction of CIB Marine i.e., CIB Marine and Victory Bancorp go up and down completely randomly.
Pair Corralation between CIB Marine and Victory Bancorp
Given the investment horizon of 90 days CIB Marine Bancshares is expected to generate 0.82 times more return on investment than Victory Bancorp. However, CIB Marine Bancshares is 1.21 times less risky than Victory Bancorp. It trades about -0.01 of its potential returns per unit of risk. The Victory Bancorp is currently generating about -0.03 per unit of risk. If you would invest 3,200 in CIB Marine Bancshares on August 28, 2024 and sell it today you would lose (400.00) from holding CIB Marine Bancshares or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 67.37% |
| Values | Daily Returns |
CIB Marine Bancshares vs. The Victory Bancorp
Performance |
| Timeline |
| CIB Marine Bancshares |
| Victory Bancorp |
CIB Marine and Victory Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIB Marine and Victory Bancorp
The main advantage of trading using opposite CIB Marine and Victory Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIB Marine position performs unexpectedly, Victory 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 Victory Bancorp will offset losses from the drop in Victory Bancorp's long position.| CIB Marine vs. U I Financial | CIB Marine vs. Heartland Banccorp | CIB Marine vs. United Bancorporation of | CIB Marine vs. Harbor Bankshares |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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