Correlation Between Exchange Bank and Truxton
Can any of the company-specific risk be diversified away by investing in both Exchange Bank and Truxton 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 Bank and Truxton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Bank and Truxton, you can compare the effects of market volatilities on Exchange Bank and Truxton 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 Bank with a short position of Truxton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Bank and Truxton.
Diversification Opportunities for Exchange Bank and Truxton
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Exchange and Truxton is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Bank and Truxton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truxton and Exchange Bank 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 Bank are associated (or correlated) with Truxton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truxton has no effect on the direction of Exchange Bank i.e., Exchange Bank and Truxton go up and down completely randomly.
Pair Corralation between Exchange Bank and Truxton
Given the investment horizon of 90 days Exchange Bank is expected to generate 1.87 times more return on investment than Truxton. However, Exchange Bank is 1.87 times more volatile than Truxton. It trades about 0.03 of its potential returns per unit of risk. Truxton is currently generating about 0.06 per unit of risk. If you would invest 9,153 in Exchange Bank on September 2, 2024 and sell it today you would earn a total of 1,567 from holding Exchange Bank or generate 17.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.13% |
| Values | Daily Returns |
Exchange Bank vs. Truxton
Performance |
| Timeline |
| Exchange Bank |
| Truxton |
Exchange Bank and Truxton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Bank and Truxton
The main advantage of trading using opposite Exchange Bank and Truxton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Bank position performs unexpectedly, Truxton 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 Truxton will offset losses from the drop in Truxton's long position.| Exchange Bank vs. Foreign Trade Bank | Exchange Bank vs. Comerica | Exchange Bank vs. Delhi Bank Corp | Exchange Bank 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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