Correlation Between LINKBANCORP and Summit Bancshares
Can any of the company-specific risk be diversified away by investing in both LINKBANCORP and Summit Bancshares 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 LINKBANCORP and Summit Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LINKBANCORP and Summit Bancshares, you can compare the effects of market volatilities on LINKBANCORP and Summit Bancshares 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 LINKBANCORP with a short position of Summit Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of LINKBANCORP and Summit Bancshares.
Diversification Opportunities for LINKBANCORP and Summit Bancshares
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LINKBANCORP and Summit is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding LINKBANCORP and Summit Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Bancshares and LINKBANCORP 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 LINKBANCORP are associated (or correlated) with Summit Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bancshares has no effect on the direction of LINKBANCORP i.e., LINKBANCORP and Summit Bancshares go up and down completely randomly.
Pair Corralation between LINKBANCORP and Summit Bancshares
Given the investment horizon of 90 days LINKBANCORP is expected to generate 1.39 times less return on investment than Summit Bancshares. In addition to that, LINKBANCORP is 1.06 times more volatile than Summit Bancshares. It trades about 0.04 of its total potential returns per unit of risk. Summit Bancshares is currently generating about 0.06 per unit of volatility. If you would invest 3,522 in Summit Bancshares on September 12, 2024 and sell it today you would earn a total of 859.00 from holding Summit Bancshares or generate 24.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 57.39% |
| Values | Daily Returns |
LINKBANCORP vs. Summit Bancshares
Performance |
| Timeline |
| LINKBANCORP |
| Summit Bancshares |
LINKBANCORP and Summit Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LINKBANCORP and Summit Bancshares
The main advantage of trading using opposite LINKBANCORP and Summit Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LINKBANCORP position performs unexpectedly, Summit Bancshares 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 Summit Bancshares will offset losses from the drop in Summit Bancshares' long position.| LINKBANCORP vs. Home Federal Bancorp | LINKBANCORP vs. Lake Shore Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP vs. Magyar Bancorp |
| Summit Bancshares vs. PT Bank Rakyat | Summit Bancshares vs. Morningstar Unconstrained Allocation | Summit Bancshares vs. Bondbloxx ETF Trust | Summit Bancshares vs. Spring Valley Acquisition |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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