Correlation Between Northeast Community and 1ST SUMMIT
Can any of the company-specific risk be diversified away by investing in both Northeast Community and 1ST SUMMIT 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 Northeast Community and 1ST SUMMIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northeast Community Bancorp and 1ST SUMMIT BANCORP, you can compare the effects of market volatilities on Northeast Community and 1ST SUMMIT 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 Northeast Community with a short position of 1ST SUMMIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northeast Community and 1ST SUMMIT.
Diversification Opportunities for Northeast Community and 1ST SUMMIT
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Northeast and 1ST is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Northeast Community Bancorp and 1ST SUMMIT BANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1ST SUMMIT BANCORP and Northeast Community 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 Northeast Community Bancorp are associated (or correlated) with 1ST SUMMIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1ST SUMMIT BANCORP has no effect on the direction of Northeast Community i.e., Northeast Community and 1ST SUMMIT go up and down completely randomly.
Pair Corralation between Northeast Community and 1ST SUMMIT
Given the investment horizon of 90 days Northeast Community Bancorp is expected to generate 4.32 times more return on investment than 1ST SUMMIT. However, Northeast Community is 4.32 times more volatile than 1ST SUMMIT BANCORP. It trades about 0.29 of its potential returns per unit of risk. 1ST SUMMIT BANCORP is currently generating about 0.08 per unit of risk. If you would invest 2,614 in Northeast Community Bancorp on September 3, 2024 and sell it today you would earn a total of 401.00 from holding Northeast Community Bancorp or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northeast Community Bancorp vs. 1ST SUMMIT BANCORP
Performance |
| Timeline |
| Northeast Community |
| 1ST SUMMIT BANCORP |
Northeast Community and 1ST SUMMIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northeast Community and 1ST SUMMIT
The main advantage of trading using opposite Northeast Community and 1ST SUMMIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northeast Community position performs unexpectedly, 1ST SUMMIT 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 1ST SUMMIT will offset losses from the drop in 1ST SUMMIT's long position.| Northeast Community vs. Community West Bancshares | Northeast Community vs. First Financial Northwest | Northeast Community vs. First Capital | Northeast Community vs. HomeTrust Bancshares |
| 1ST SUMMIT vs. Apollo Bancorp | 1ST SUMMIT vs. Oregon Pacific Bancorp | 1ST SUMMIT vs. The Farmers Bank | 1ST SUMMIT vs. Community Bankers |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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