Correlation Between Century Financial and Apollo Bancorp
Can any of the company-specific risk be diversified away by investing in both Century Financial and Apollo Bancorp 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 Financial and Apollo Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Financial Corp and Apollo Bancorp, you can compare the effects of market volatilities on Century Financial and Apollo Bancorp 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 Financial with a short position of Apollo Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Financial and Apollo Bancorp.
Diversification Opportunities for Century Financial and Apollo Bancorp
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Century and Apollo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Century Financial Corp and Apollo Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Bancorp and Century Financial 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 Financial Corp are associated (or correlated) with Apollo Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Bancorp has no effect on the direction of Century Financial i.e., Century Financial and Apollo Bancorp go up and down completely randomly.
Pair Corralation between Century Financial and Apollo Bancorp
Given the investment horizon of 90 days Century Financial Corp is expected to generate 0.56 times more return on investment than Apollo Bancorp. However, Century Financial Corp is 1.78 times less risky than Apollo Bancorp. It trades about 0.15 of its potential returns per unit of risk. Apollo Bancorp is currently generating about 0.07 per unit of risk. If you would invest 2,417 in Century Financial Corp on November 27, 2024 and sell it today you would earn a total of 1,808 from holding Century Financial Corp or generate 74.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 45.8% |
| Values | Daily Returns |
Century Financial Corp vs. Apollo Bancorp
Performance |
| Timeline |
| Century Financial Corp |
| Apollo Bancorp |
Century Financial and Apollo Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Financial and Apollo Bancorp
The main advantage of trading using opposite Century Financial and Apollo Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Financial position performs unexpectedly, Apollo Bancorp 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 Apollo Bancorp will offset losses from the drop in Apollo Bancorp's long position.| Century Financial vs. Eastern Michigan Financial | Century Financial vs. Grand River Commerce | Century Financial vs. Bank of Botetourt | Century Financial vs. FNB Inc |
| Apollo Bancorp vs. The Farmers Bank | Apollo Bancorp vs. Bank of Utica | Apollo Bancorp vs. Delhi Bank Corp | Apollo Bancorp vs. CCSB Financial Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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