Correlation Between GOODYEAR T and Berkshire Hills
Can any of the company-specific risk be diversified away by investing in both GOODYEAR T and Berkshire Hills 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 GOODYEAR T and Berkshire Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOODYEAR T RUBBER and Berkshire Hills Bancorp, you can compare the effects of market volatilities on GOODYEAR T and Berkshire Hills 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 GOODYEAR T with a short position of Berkshire Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOODYEAR T and Berkshire Hills.
Diversification Opportunities for GOODYEAR T and Berkshire Hills
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GOODYEAR and Berkshire is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding GOODYEAR T RUBBER and Berkshire Hills Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hills Bancorp and GOODYEAR T 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 GOODYEAR T RUBBER are associated (or correlated) with Berkshire Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hills Bancorp has no effect on the direction of GOODYEAR T i.e., GOODYEAR T and Berkshire Hills go up and down completely randomly.
Pair Corralation between GOODYEAR T and Berkshire Hills
Assuming the 90 days trading horizon GOODYEAR T RUBBER is expected to generate 1.62 times more return on investment than Berkshire Hills. However, GOODYEAR T is 1.62 times more volatile than Berkshire Hills Bancorp. It trades about 0.37 of its potential returns per unit of risk. Berkshire Hills Bancorp is currently generating about 0.18 per unit of risk. If you would invest 818.00 in GOODYEAR T RUBBER on October 20, 2024 and sell it today you would earn a total of 107.00 from holding GOODYEAR T RUBBER or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOODYEAR T RUBBER vs. Berkshire Hills Bancorp
Performance |
| Timeline |
| GOODYEAR T RUBBER |
| Berkshire Hills Bancorp |
GOODYEAR T and Berkshire Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOODYEAR T and Berkshire Hills
The main advantage of trading using opposite GOODYEAR T and Berkshire Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOODYEAR T position performs unexpectedly, Berkshire Hills 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 Berkshire Hills will offset losses from the drop in Berkshire Hills' long position.| GOODYEAR T vs. ONWARD MEDICAL BV | GOODYEAR T vs. PEPTONIC MEDICAL | GOODYEAR T vs. MEDICAL FACILITIES NEW | GOODYEAR T vs. Cincinnati Financial Corp |
| Berkshire Hills vs. POSBO UNSPADRS20YC1 | Berkshire Hills vs. Postal Savings Bank | Berkshire Hills vs. Truist Financial | Berkshire Hills vs. OVERSEA CHINUNSPADR2 |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |