Correlation Between Grand River and Solvay Bank
Can any of the company-specific risk be diversified away by investing in both Grand River and Solvay Bank 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 Grand River and Solvay Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand River Commerce and Solvay Bank Corp, you can compare the effects of market volatilities on Grand River and Solvay Bank 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 Grand River with a short position of Solvay Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand River and Solvay Bank.
Diversification Opportunities for Grand River and Solvay Bank
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grand and Solvay is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Grand River Commerce and Solvay Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solvay Bank Corp and Grand River 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 Grand River Commerce are associated (or correlated) with Solvay Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solvay Bank Corp has no effect on the direction of Grand River i.e., Grand River and Solvay Bank go up and down completely randomly.
Pair Corralation between Grand River and Solvay Bank
Given the investment horizon of 90 days Grand River Commerce is expected to generate 3.18 times more return on investment than Solvay Bank. However, Grand River is 3.18 times more volatile than Solvay Bank Corp. It trades about 0.03 of its potential returns per unit of risk. Solvay Bank Corp is currently generating about -0.07 per unit of risk. If you would invest 303.00 in Grand River Commerce on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Grand River Commerce or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Grand River Commerce vs. Solvay Bank Corp
Performance |
| Timeline |
| Grand River Commerce |
| Solvay Bank Corp |
Grand River and Solvay Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand River and Solvay Bank
The main advantage of trading using opposite Grand River and Solvay Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand River position performs unexpectedly, Solvay Bank 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 Solvay Bank will offset losses from the drop in Solvay Bank's long position.| Grand River vs. FS Bancorp | Grand River vs. Eastern Michigan Financial | Grand River vs. Bank of Botetourt | Grand River vs. FNB Inc |
| Solvay Bank vs. Invesco High Income | Solvay Bank vs. Blackrock Muniholdings Ny | Solvay Bank vs. Nuveen California Select | Solvay Bank vs. MFS Investment Grade |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |