Correlation Between Katahdin Bankshares and SVB T
Can any of the company-specific risk be diversified away by investing in both Katahdin Bankshares and SVB T 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 Katahdin Bankshares and SVB T into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Katahdin Bankshares Corp and SVB T Corp, you can compare the effects of market volatilities on Katahdin Bankshares and SVB T 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 Katahdin Bankshares with a short position of SVB T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Katahdin Bankshares and SVB T.
Diversification Opportunities for Katahdin Bankshares and SVB T
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Katahdin and SVB is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Katahdin Bankshares Corp and SVB T Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVB T Corp and Katahdin Bankshares 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 Katahdin Bankshares Corp are associated (or correlated) with SVB T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVB T Corp has no effect on the direction of Katahdin Bankshares i.e., Katahdin Bankshares and SVB T go up and down completely randomly.
Pair Corralation between Katahdin Bankshares and SVB T
Given the investment horizon of 90 days Katahdin Bankshares Corp is expected to generate 1.06 times more return on investment than SVB T. However, Katahdin Bankshares is 1.06 times more volatile than SVB T Corp. It trades about 0.03 of its potential returns per unit of risk. SVB T Corp is currently generating about 0.0 per unit of risk. If you would invest 2,073 in Katahdin Bankshares Corp on October 28, 2024 and sell it today you would earn a total of 300.00 from holding Katahdin Bankshares Corp or generate 14.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 87.21% |
| Values | Daily Returns |
Katahdin Bankshares Corp vs. SVB T Corp
Performance |
| Timeline |
| Katahdin Bankshares Corp |
| SVB T Corp |
Katahdin Bankshares and SVB T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Katahdin Bankshares and SVB T
The main advantage of trading using opposite Katahdin Bankshares and SVB T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Katahdin Bankshares position performs unexpectedly, SVB T 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 SVB T will offset losses from the drop in SVB T's long position.| Katahdin Bankshares vs. FNB Inc | Katahdin Bankshares vs. Mifflinburg Bancorp | Katahdin Bankshares vs. Commercial National Financial | Katahdin Bankshares vs. Apollo Bancorp |
| SVB T vs. Katahdin Bankshares Corp | SVB T vs. Marquette National Corp | SVB T vs. United Bancorporation of | SVB T vs. Fentura Financial |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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