Correlation Between Exchange Bankshares and Connecticut Light
Can any of the company-specific risk be diversified away by investing in both Exchange Bankshares and Connecticut Light 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 Exchange Bankshares and Connecticut Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Bankshares and The Connecticut Light, you can compare the effects of market volatilities on Exchange Bankshares and Connecticut Light 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 Exchange Bankshares with a short position of Connecticut Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Bankshares and Connecticut Light.
Diversification Opportunities for Exchange Bankshares and Connecticut Light
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exchange and Connecticut is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Bankshares and The Connecticut Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connecticut Light and Exchange Bankshares 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 Exchange Bankshares are associated (or correlated) with Connecticut Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connecticut Light has no effect on the direction of Exchange Bankshares i.e., Exchange Bankshares and Connecticut Light go up and down completely randomly.
Pair Corralation between Exchange Bankshares and Connecticut Light
If you would invest 4,000 in The Connecticut Light on November 4, 2024 and sell it today you would earn a total of 100.00 from holding The Connecticut Light or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exchange Bankshares vs. The Connecticut Light
Performance |
| Timeline |
| Exchange Bankshares |
| Connecticut Light |
Exchange Bankshares and Connecticut Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Bankshares and Connecticut Light
The main advantage of trading using opposite Exchange Bankshares and Connecticut Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Bankshares position performs unexpectedly, Connecticut Light 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 Connecticut Light will offset losses from the drop in Connecticut Light's long position.| Exchange Bankshares vs. First Community Financial | Exchange Bankshares vs. National Capital Bank | Exchange Bankshares vs. Oakworth Capital | Exchange Bankshares vs. Truxton |
| Connecticut Light vs. Amkor Technology | Connecticut Light vs. Paysafe | Connecticut Light vs. Molecular Partners AG | Connecticut Light vs. Alto Neuroscience, |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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