Correlation Between Pinnacle Financial and New York
Can any of the company-specific risk be diversified away by investing in both Pinnacle Financial and New York 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 Pinnacle Financial and New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Financial Partners and New York Community, you can compare the effects of market volatilities on Pinnacle Financial and New York 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 Pinnacle Financial with a short position of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Financial and New York.
Diversification Opportunities for Pinnacle Financial and New York
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pinnacle and New is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Financial Partners and New York Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Community and Pinnacle Financial 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 Pinnacle Financial Partners are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Community has no effect on the direction of Pinnacle Financial i.e., Pinnacle Financial and New York go up and down completely randomly.
Pair Corralation between Pinnacle Financial and New York
Assuming the 90 days horizon Pinnacle Financial Partners is expected to generate 0.41 times more return on investment than New York. However, Pinnacle Financial Partners is 2.46 times less risky than New York. It trades about 0.06 of its potential returns per unit of risk. New York Community is currently generating about 0.02 per unit of risk. If you would invest 2,096 in Pinnacle Financial Partners on August 26, 2024 and sell it today you would earn a total of 379.00 from holding Pinnacle Financial Partners or generate 18.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinnacle Financial Partners vs. New York Community
Performance |
| Timeline |
| Pinnacle Financial |
| New York Community |
Pinnacle Financial and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Financial and New York
The main advantage of trading using opposite Pinnacle Financial and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Financial position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Pinnacle Financial vs. OceanFirst Financial Corp | Pinnacle Financial vs. Heartland Financial USA | Pinnacle Financial vs. Wintrust Financial Corp | Pinnacle Financial vs. Dime Community Bancshares |
| New York vs. Wintrust Financial Corp | New York vs. Pinnacle Financial Partners | New York vs. Associated Banc Corp | New York vs. WesBanco |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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