Correlation Between Century Next and Greenville Federal
Can any of the company-specific risk be diversified away by investing in both Century Next and Greenville Federal 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 Century Next and Greenville Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Next Financial and Greenville Federal Financial, you can compare the effects of market volatilities on Century Next and Greenville Federal 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 Century Next with a short position of Greenville Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Next and Greenville Federal.
Diversification Opportunities for Century Next and Greenville Federal
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Century and Greenville is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Century Next Financial and Greenville Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenville Federal and Century Next 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 Century Next Financial are associated (or correlated) with Greenville Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenville Federal has no effect on the direction of Century Next i.e., Century Next and Greenville Federal go up and down completely randomly.
Pair Corralation between Century Next and Greenville Federal
Given the investment horizon of 90 days Century Next Financial is expected to generate 0.56 times more return on investment than Greenville Federal. However, Century Next Financial is 1.78 times less risky than Greenville Federal. It trades about 0.07 of its potential returns per unit of risk. Greenville Federal Financial is currently generating about 0.0 per unit of risk. If you would invest 2,850 in Century Next Financial on August 29, 2024 and sell it today you would earn a total of 1,025 from holding Century Next Financial or generate 35.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 60.89% |
| Values | Daily Returns |
Century Next Financial vs. Greenville Federal Financial
Performance |
| Timeline |
| Century Next Financial |
| Greenville Federal |
Century Next and Greenville Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Next and Greenville Federal
The main advantage of trading using opposite Century Next and Greenville Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Next position performs unexpectedly, Greenville Federal 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 Greenville Federal will offset losses from the drop in Greenville Federal's long position.| Century Next vs. Citizens Financial Corp | Century Next vs. Triad Business Bank | Century Next vs. First Ottawa Bancshares | Century Next vs. CCSB Financial Corp |
| Greenville Federal vs. First Bankers Trustshares | Greenville Federal vs. First Ottawa Bancshares | Greenville Federal vs. Coastal Carolina Bancshares | Greenville Federal vs. Citizens Bancorp Investment |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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