Correlation Between ESSA Bancorp and Cullman Bancorp
Can any of the company-specific risk be diversified away by investing in both ESSA Bancorp and Cullman 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 ESSA Bancorp and Cullman Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESSA Bancorp and Cullman Bancorp, you can compare the effects of market volatilities on ESSA Bancorp and Cullman 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 ESSA Bancorp with a short position of Cullman Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESSA Bancorp and Cullman Bancorp.
Diversification Opportunities for ESSA Bancorp and Cullman Bancorp
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ESSA and Cullman is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ESSA Bancorp and Cullman Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullman Bancorp and ESSA 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 ESSA Bancorp are associated (or correlated) with Cullman Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullman Bancorp has no effect on the direction of ESSA Bancorp i.e., ESSA Bancorp and Cullman Bancorp go up and down completely randomly.
Pair Corralation between ESSA Bancorp and Cullman Bancorp
If you would invest 1,877 in ESSA Bancorp on August 25, 2024 and sell it today you would earn a total of 153.00 from holding ESSA Bancorp or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 2.22% |
| Values | Daily Returns |
ESSA Bancorp vs. Cullman Bancorp
Performance |
| Timeline |
| ESSA Bancorp |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ESSA Bancorp and Cullman Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESSA Bancorp and Cullman Bancorp
The main advantage of trading using opposite ESSA Bancorp and Cullman Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESSA Bancorp position performs unexpectedly, Cullman 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 Cullman Bancorp will offset losses from the drop in Cullman Bancorp's long position.| ESSA Bancorp vs. Fifth Third Bancorp | ESSA Bancorp vs. Zions Bancorporation | ESSA Bancorp vs. Huntington Bancshares Incorporated | ESSA Bancorp vs. PNC Financial Services |
| Cullman Bancorp vs. Home Federal Bancorp | Cullman Bancorp vs. Lake Shore Bancorp | Cullman Bancorp vs. Community West Bancshares | Cullman Bancorp vs. Magyar Bancorp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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