Correlation Between Embassy Bancorp and DBS Group
Can any of the company-specific risk be diversified away by investing in both Embassy Bancorp and DBS Group 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 Embassy Bancorp and DBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embassy Bancorp and DBS Group Holdings, you can compare the effects of market volatilities on Embassy Bancorp and DBS Group 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 Embassy Bancorp with a short position of DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embassy Bancorp and DBS Group.
Diversification Opportunities for Embassy Bancorp and DBS Group
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Embassy and DBS is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Embassy Bancorp and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings and Embassy 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 Embassy Bancorp are associated (or correlated) with DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of Embassy Bancorp i.e., Embassy Bancorp and DBS Group go up and down completely randomly.
Pair Corralation between Embassy Bancorp and DBS Group
Given the investment horizon of 90 days Embassy Bancorp is expected to generate 2.72 times less return on investment than DBS Group. In addition to that, Embassy Bancorp is 2.64 times more volatile than DBS Group Holdings. It trades about 0.01 of its total potential returns per unit of risk. DBS Group Holdings is currently generating about 0.08 per unit of volatility. If you would invest 8,700 in DBS Group Holdings on October 21, 2024 and sell it today you would earn a total of 4,199 from holding DBS Group Holdings or generate 48.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Embassy Bancorp vs. DBS Group Holdings
Performance |
| Timeline |
| Embassy Bancorp |
| DBS Group Holdings |
Embassy Bancorp and DBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embassy Bancorp and DBS Group
The main advantage of trading using opposite Embassy Bancorp and DBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embassy Bancorp position performs unexpectedly, DBS Group 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 DBS Group will offset losses from the drop in DBS Group's long position.| Embassy Bancorp vs. Pioneer Bankcorp | Embassy Bancorp vs. Liberty Northwest Bancorp | Embassy Bancorp vs. First Community | Embassy Bancorp vs. Coeur dAlene Bancorp |
| DBS Group vs. KBC Groep NV | DBS Group vs. United Overseas Bank | DBS Group vs. Embassy Bancorp | DBS Group vs. Overseas Chinese Banking |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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