Correlation Between Century Next and Summit Bank
Can any of the company-specific risk be diversified away by investing in both Century Next 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 Century Next and Summit Bank 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 Summit Bank Group, you can compare the effects of market volatilities on Century Next 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 Century Next with a short position of Summit Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Next and Summit Bank.
Diversification Opportunities for Century Next and Summit Bank
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Century and Summit is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Century Next Financial 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 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 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 Century Next i.e., Century Next and Summit Bank go up and down completely randomly.
Pair Corralation between Century Next and Summit Bank
Given the investment horizon of 90 days Century Next Financial is expected to generate 0.63 times more return on investment than Summit Bank. However, Century Next Financial is 1.58 times less risky than Summit Bank. It trades about -0.2 of its potential returns per unit of risk. Summit Bank Group is currently generating about -0.36 per unit of risk. If you would invest 3,789 in Century Next Financial on October 23, 2024 and sell it today you would lose (89.00) from holding Century Next Financial or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Century Next Financial vs. Summit Bank Group
Performance |
| Timeline |
| Century Next Financial |
| Summit Bank Group |
Century Next and Summit Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Next and Summit Bank
The main advantage of trading using opposite Century Next and Summit Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Next 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.| Century Next vs. Citizens Financial Corp | Century Next vs. Triad Business Bank | Century Next vs. First Ottawa Bancshares | Century Next vs. CCSB Financial Corp |
| Summit Bank vs. Century Next Financial | Summit Bank vs. Triad Business Bank | Summit Bank vs. First Ottawa Bancshares | Summit Bank vs. First Community Financial |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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