Correlation Between ECB Bancorp and Civista Bancshares
Can any of the company-specific risk be diversified away by investing in both ECB Bancorp and Civista 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 ECB Bancorp and Civista Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECB Bancorp and Civista Bancshares, you can compare the effects of market volatilities on ECB Bancorp and Civista 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 ECB Bancorp with a short position of Civista Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECB Bancorp and Civista Bancshares.
Diversification Opportunities for ECB Bancorp and Civista Bancshares
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ECB and Civista is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ECB Bancorp and Civista Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civista Bancshares and ECB 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 ECB Bancorp are associated (or correlated) with Civista Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civista Bancshares has no effect on the direction of ECB Bancorp i.e., ECB Bancorp and Civista Bancshares go up and down completely randomly.
Pair Corralation between ECB Bancorp and Civista Bancshares
Given the investment horizon of 90 days ECB Bancorp is expected to under-perform the Civista Bancshares. But the stock apears to be less risky and, when comparing its historical volatility, ECB Bancorp is 2.35 times less risky than Civista Bancshares. The stock trades about -0.06 of its potential returns per unit of risk. The Civista Bancshares is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 1,835 in Civista Bancshares on August 27, 2024 and sell it today you would earn a total of 488.00 from holding Civista Bancshares or generate 26.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECB Bancorp vs. Civista Bancshares
Performance |
| Timeline |
| ECB Bancorp |
| Civista Bancshares |
ECB Bancorp and Civista Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECB Bancorp and Civista Bancshares
The main advantage of trading using opposite ECB Bancorp and Civista Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECB Bancorp position performs unexpectedly, Civista 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 Civista Bancshares will offset losses from the drop in Civista Bancshares' long position.| ECB Bancorp vs. Home Federal Bancorp | ECB Bancorp vs. Magyar Bancorp | ECB Bancorp vs. Community West Bancshares | ECB Bancorp vs. Lake Shore Bancorp |
| Civista Bancshares vs. Fifth Third Bancorp | Civista Bancshares vs. Zions Bancorporation | Civista Bancshares vs. Huntington Bancshares Incorporated | Civista 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |