Correlation Between Cullman Bancorp and Preferred Bank
Can any of the company-specific risk be diversified away by investing in both Cullman Bancorp and Preferred 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 Cullman Bancorp and Preferred Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullman Bancorp and Preferred Bank, you can compare the effects of market volatilities on Cullman Bancorp and Preferred 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 Cullman Bancorp with a short position of Preferred Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullman Bancorp and Preferred Bank.
Diversification Opportunities for Cullman Bancorp and Preferred Bank
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cullman and Preferred is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cullman Bancorp and Preferred Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Preferred Bank and Cullman 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 Cullman Bancorp are associated (or correlated) with Preferred Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Preferred Bank has no effect on the direction of Cullman Bancorp i.e., Cullman Bancorp and Preferred Bank go up and down completely randomly.
Pair Corralation between Cullman Bancorp and Preferred Bank
If you would invest 8,530 in Preferred Bank on August 29, 2024 and sell it today you would earn a total of 1,032 from holding Preferred Bank or generate 12.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Cullman Bancorp vs. Preferred Bank
Performance |
| Timeline |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Preferred Bank |
Cullman Bancorp and Preferred Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullman Bancorp and Preferred Bank
The main advantage of trading using opposite Cullman Bancorp and Preferred Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullman Bancorp position performs unexpectedly, Preferred 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 Preferred Bank will offset losses from the drop in Preferred Bank's long position.| Cullman Bancorp vs. Home Federal Bancorp | Cullman Bancorp vs. Lake Shore Bancorp | Cullman Bancorp vs. Community West Bancshares | Cullman Bancorp vs. Magyar Bancorp |
| Preferred Bank vs. Pacific Premier Bancorp | Preferred Bank vs. Heritage Financial | Preferred Bank vs. QCR Holdings | Preferred Bank vs. Lakeland 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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