Correlation Between Community West and Canterbury Park
Can any of the company-specific risk be diversified away by investing in both Community West and Canterbury Park 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 Community West and Canterbury Park into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community West Bancshares and Canterbury Park Holding, you can compare the effects of market volatilities on Community West and Canterbury Park 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 Community West with a short position of Canterbury Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community West and Canterbury Park.
Diversification Opportunities for Community West and Canterbury Park
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Community and Canterbury is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Community West Bancshares and Canterbury Park Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canterbury Park Holding and Community West 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 Community West Bancshares are associated (or correlated) with Canterbury Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canterbury Park Holding has no effect on the direction of Community West i.e., Community West and Canterbury Park go up and down completely randomly.
Pair Corralation between Community West and Canterbury Park
Given the investment horizon of 90 days Community West is expected to generate 38.42 times less return on investment than Canterbury Park. But when comparing it to its historical volatility, Community West Bancshares is 38.88 times less risky than Canterbury Park. It trades about 0.09 of its potential returns per unit of risk. Canterbury Park Holding is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,660 in Canterbury Park Holding on August 27, 2024 and sell it today you would lose (665.00) from holding Canterbury Park Holding or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.74% |
| Values | Daily Returns |
Community West Bancshares vs. Canterbury Park Holding
Performance |
| Timeline |
| Community West Bancshares |
| Canterbury Park Holding |
Community West and Canterbury Park Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community West and Canterbury Park
The main advantage of trading using opposite Community West and Canterbury Park positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community West position performs unexpectedly, Canterbury Park 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 Canterbury Park will offset losses from the drop in Canterbury Park's long position.| Community West vs. Home Federal Bancorp | Community West vs. Magyar Bancorp | Community West vs. First Northwest Bancorp | Community West vs. First Financial Northwest |
| Canterbury Park vs. Community West Bancshares | Canterbury Park vs. Citizens Community Bancorp | Canterbury Park vs. Bridgford Foods |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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