Correlation Between Cullman Bancorp and Shore Bancshares
Can any of the company-specific risk be diversified away by investing in both Cullman Bancorp and Shore Bancshares 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 Shore Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullman Bancorp and Shore Bancshares, you can compare the effects of market volatilities on Cullman Bancorp and Shore Bancshares 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 Shore Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullman Bancorp and Shore Bancshares.
Diversification Opportunities for Cullman Bancorp and Shore Bancshares
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cullman and Shore is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cullman Bancorp and Shore Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shore Bancshares 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 Shore Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shore Bancshares has no effect on the direction of Cullman Bancorp i.e., Cullman Bancorp and Shore Bancshares go up and down completely randomly.
Pair Corralation between Cullman Bancorp and Shore Bancshares
Given the investment horizon of 90 days Cullman Bancorp is expected to under-perform the Shore Bancshares. But the stock apears to be less risky and, when comparing its historical volatility, Cullman Bancorp is 1.81 times less risky than Shore Bancshares. The stock trades about -0.02 of its potential returns per unit of risk. The Shore Bancshares is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,778 in Shore Bancshares on September 3, 2024 and sell it today you would lose (133.00) from holding Shore Bancshares or give up 7.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.99% |
| Values | Daily Returns |
Cullman Bancorp vs. Shore Bancshares
Performance |
| Timeline |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shore Bancshares |
Cullman Bancorp and Shore Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullman Bancorp and Shore Bancshares
The main advantage of trading using opposite Cullman Bancorp and Shore Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullman Bancorp position performs unexpectedly, Shore Bancshares 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 Shore Bancshares will offset losses from the drop in Shore Bancshares' 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 |
| Shore Bancshares vs. Home Federal Bancorp | Shore Bancshares vs. IF Bancorp | Shore Bancshares vs. Western New England | Shore Bancshares vs. Colony Bankcorp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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