Correlation Between Independent Bank and Bank Utica
Can any of the company-specific risk be diversified away by investing in both Independent Bank and Bank 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 Independent Bank and Bank Utica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Independent Bank and Bank Utica Ny, you can compare the effects of market volatilities on Independent Bank and Bank 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 Independent Bank with a short position of Bank Utica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independent Bank and Bank Utica.
Diversification Opportunities for Independent Bank and Bank Utica
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Independent and Bank is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Independent Bank and Bank Utica Ny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Utica Ny and Independent 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 Independent Bank are associated (or correlated) with Bank 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 Utica Ny has no effect on the direction of Independent Bank i.e., Independent Bank and Bank Utica go up and down completely randomly.
Pair Corralation between Independent Bank and Bank Utica
Given the investment horizon of 90 days Independent Bank is expected to generate 1.77 times more return on investment than Bank Utica. However, Independent Bank is 1.77 times more volatile than Bank Utica Ny. It trades about 0.2 of its potential returns per unit of risk. Bank Utica Ny is currently generating about 0.14 per unit of risk. If you would invest 3,254 in Independent Bank on September 1, 2024 and sell it today you would earn a total of 509.00 from holding Independent Bank or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Independent Bank vs. Bank Utica Ny
Performance |
| Timeline |
| Independent Bank |
| Bank Utica Ny |
Independent Bank and Bank Utica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Independent Bank and Bank Utica
The main advantage of trading using opposite Independent Bank and Bank Utica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independent Bank position performs unexpectedly, Bank 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 Utica will offset losses from the drop in Bank Utica's long position.| Independent Bank vs. First Northwest Bancorp | Independent Bank vs. Community West Bancshares | Independent Bank vs. First Financial Northwest | Independent Bank vs. Great Southern Bancorp |
| Bank Utica vs. Bank Mandiri Persero | Bank Utica vs. Piraeus Bank SA | Bank Utica vs. Kasikornbank Public Co | Bank Utica vs. Turkiye Garanti Bankasi |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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