Correlation Between Cullman Bancorp and Summit Bancshares
Can any of the company-specific risk be diversified away by investing in both Cullman Bancorp and Summit 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 Summit 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 Summit Bancshares, you can compare the effects of market volatilities on Cullman Bancorp and Summit 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 Summit Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullman Bancorp and Summit Bancshares.
Diversification Opportunities for Cullman Bancorp and Summit Bancshares
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cullman and Summit is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cullman Bancorp and Summit Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit 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 Summit Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bancshares has no effect on the direction of Cullman Bancorp i.e., Cullman Bancorp and Summit Bancshares go up and down completely randomly.
Pair Corralation between Cullman Bancorp and Summit Bancshares
Given the investment horizon of 90 days Cullman Bancorp is expected to under-perform the Summit Bancshares. But the stock apears to be less risky and, when comparing its historical volatility, Cullman Bancorp is 1.81 times less risky than Summit Bancshares. The stock trades about -0.12 of its potential returns per unit of risk. The Summit Bancshares is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,930 in Summit Bancshares on September 3, 2024 and sell it today you would earn a total of 457.00 from holding Summit Bancshares or generate 11.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.41% |
| Values | Daily Returns |
Cullman Bancorp vs. Summit Bancshares
Performance |
| Timeline |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Summit Bancshares |
Cullman Bancorp and Summit Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullman Bancorp and Summit Bancshares
The main advantage of trading using opposite Cullman Bancorp and Summit Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullman Bancorp position performs unexpectedly, Summit 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 Summit Bancshares will offset losses from the drop in Summit 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 |
| Summit Bancshares vs. First Hawaiian | Summit Bancshares vs. Central Pacific Financial | Summit Bancshares vs. Territorial Bancorp | Summit Bancshares vs. Comerica |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |