Correlation Between Peak Bancorp and First Sound
Can any of the company-specific risk be diversified away by investing in both Peak Bancorp and First Sound 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 Peak Bancorp and First Sound into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peak Bancorp and First Sound Bank, you can compare the effects of market volatilities on Peak Bancorp and First Sound 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 Peak Bancorp with a short position of First Sound. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Bancorp and First Sound.
Diversification Opportunities for Peak Bancorp and First Sound
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Peak and First is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Peak Bancorp and First Sound Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Sound Bank and Peak Bancorp 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 Peak Bancorp are associated (or correlated) with First Sound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Sound Bank has no effect on the direction of Peak Bancorp i.e., Peak Bancorp and First Sound go up and down completely randomly.
Pair Corralation between Peak Bancorp and First Sound
Given the investment horizon of 90 days Peak Bancorp is expected to under-perform the First Sound. But the pink sheet apears to be less risky and, when comparing its historical volatility, Peak Bancorp is 1.89 times less risky than First Sound. The pink sheet trades about -0.15 of its potential returns per unit of risk. The First Sound Bank is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 390.00 in First Sound Bank on September 2, 2024 and sell it today you would earn a total of 280.00 from holding First Sound Bank or generate 71.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 15.15% |
| Values | Daily Returns |
Peak Bancorp vs. First Sound Bank
Performance |
| Timeline |
| Peak Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Sound Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Peak Bancorp and First Sound Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peak Bancorp and First Sound
The main advantage of trading using opposite Peak Bancorp and First Sound positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peak Bancorp position performs unexpectedly, First Sound 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 First Sound will offset losses from the drop in First Sound's long position.| Peak Bancorp vs. MVB Financial Corp | Peak Bancorp vs. Finward Bancorp | Peak Bancorp vs. First Community | Peak Bancorp vs. LINKBANCORP |
| First Sound vs. Rhinebeck Bancorp | First Sound vs. Magyar Bancorp | First Sound vs. Community West Bancshares | First Sound vs. First Financial Northwest |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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