Correlation Between ConnectOne Bancorp and Sierra Bancorp
Can any of the company-specific risk be diversified away by investing in both ConnectOne Bancorp and Sierra 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 ConnectOne Bancorp and Sierra Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConnectOne Bancorp and Sierra Bancorp, you can compare the effects of market volatilities on ConnectOne Bancorp and Sierra 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 ConnectOne Bancorp with a short position of Sierra Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConnectOne Bancorp and Sierra Bancorp.
Diversification Opportunities for ConnectOne Bancorp and Sierra Bancorp
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ConnectOne and Sierra is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ConnectOne Bancorp and Sierra Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Bancorp and ConnectOne 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 ConnectOne Bancorp are associated (or correlated) with Sierra Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Bancorp has no effect on the direction of ConnectOne Bancorp i.e., ConnectOne Bancorp and Sierra Bancorp go up and down completely randomly.
Pair Corralation between ConnectOne Bancorp and Sierra Bancorp
Given the investment horizon of 90 days ConnectOne Bancorp is expected to generate 1.1 times less return on investment than Sierra Bancorp. But when comparing it to its historical volatility, ConnectOne Bancorp is 1.2 times less risky than Sierra Bancorp. It trades about 0.13 of its potential returns per unit of risk. Sierra Bancorp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,869 in Sierra Bancorp on August 24, 2024 and sell it today you would earn a total of 303.00 from holding Sierra Bancorp or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ConnectOne Bancorp vs. Sierra Bancorp
Performance |
| Timeline |
| ConnectOne Bancorp |
| Sierra Bancorp |
ConnectOne Bancorp and Sierra Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConnectOne Bancorp and Sierra Bancorp
The main advantage of trading using opposite ConnectOne Bancorp and Sierra Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConnectOne Bancorp position performs unexpectedly, Sierra 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 Sierra Bancorp will offset losses from the drop in Sierra Bancorp's long position.| ConnectOne Bancorp vs. Rhinebeck Bancorp | ConnectOne Bancorp vs. Home Bancorp | ConnectOne Bancorp vs. Parke Bancorp | ConnectOne Bancorp vs. Great Southern Bancorp |
| Sierra Bancorp vs. Home Federal Bancorp | Sierra Bancorp vs. First Financial Northwest | Sierra Bancorp vs. First Northwest Bancorp | Sierra Bancorp vs. First Capital |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance |