Correlation Between 1st Colonial and Bank of Utica
Can any of the company-specific risk be diversified away by investing in both 1st Colonial and Bank of Utica 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 1st Colonial and Bank of Utica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1st Colonial Bancorp and Bank of Utica, you can compare the effects of market volatilities on 1st Colonial and Bank of Utica 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 1st Colonial with a short position of Bank of Utica. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1st Colonial and Bank of Utica.
Diversification Opportunities for 1st Colonial and Bank of Utica
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 1st and Bank is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding 1st Colonial Bancorp and Bank of Utica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Utica and 1st Colonial 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 1st Colonial Bancorp are associated (or correlated) with Bank of Utica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Utica has no effect on the direction of 1st Colonial i.e., 1st Colonial and Bank of Utica go up and down completely randomly.
Pair Corralation between 1st Colonial and Bank of Utica
Given the investment horizon of 90 days 1st Colonial is expected to generate 1.02 times less return on investment than Bank of Utica. But when comparing it to its historical volatility, 1st Colonial Bancorp is 3.85 times less risky than Bank of Utica. It trades about 0.07 of its potential returns per unit of risk. Bank of Utica is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 49,613 in Bank of Utica on November 27, 2024 and sell it today you would earn a total of 287.00 from holding Bank of Utica or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 65.52% |
| Values | Daily Returns |
1st Colonial Bancorp vs. Bank of Utica
Performance |
| Timeline |
| 1st Colonial Bancorp |
| Bank of Utica |
1st Colonial and Bank of Utica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1st Colonial and Bank of Utica
The main advantage of trading using opposite 1st Colonial and Bank of Utica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1st Colonial position performs unexpectedly, Bank of Utica 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 Bank of Utica will offset losses from the drop in Bank of Utica's long position.| 1st Colonial vs. CCSB Financial Corp | 1st Colonial vs. Bank of Utica | 1st Colonial vs. First Community Financial | 1st Colonial vs. BEO Bancorp |
| Bank of Utica vs. CCSB Financial Corp | Bank of Utica vs. First Community Financial | Bank of Utica vs. BEO Bancorp | Bank of Utica vs. First Community |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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