Correlation Between Provident Bancorp and Commerzbank
Can any of the company-specific risk be diversified away by investing in both Provident Bancorp and Commerzbank 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 Provident Bancorp and Commerzbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Provident Bancorp and Commerzbank AG PK, you can compare the effects of market volatilities on Provident Bancorp and Commerzbank 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 Provident Bancorp with a short position of Commerzbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provident Bancorp and Commerzbank.
Diversification Opportunities for Provident Bancorp and Commerzbank
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Provident and Commerzbank is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Provident Bancorp and Commerzbank AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG PK and Provident 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 Provident Bancorp are associated (or correlated) with Commerzbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerzbank AG PK has no effect on the direction of Provident Bancorp i.e., Provident Bancorp and Commerzbank go up and down completely randomly.
Pair Corralation between Provident Bancorp and Commerzbank
Given the investment horizon of 90 days Provident Bancorp is expected to generate 1.34 times less return on investment than Commerzbank. In addition to that, Provident Bancorp is 1.04 times more volatile than Commerzbank AG PK. It trades about 0.05 of its total potential returns per unit of risk. Commerzbank AG PK is currently generating about 0.07 per unit of volatility. If you would invest 792.00 in Commerzbank AG PK on September 3, 2024 and sell it today you would earn a total of 746.00 from holding Commerzbank AG PK or generate 94.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Provident Bancorp vs. Commerzbank AG PK
Performance |
| Timeline |
| Provident Bancorp |
| Commerzbank AG PK |
Provident Bancorp and Commerzbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Provident Bancorp and Commerzbank
The main advantage of trading using opposite Provident Bancorp and Commerzbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provident Bancorp position performs unexpectedly, Commerzbank 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 Commerzbank will offset losses from the drop in Commerzbank's long position.| Provident Bancorp vs. Home Federal Bancorp | Provident Bancorp vs. Community West Bancshares | Provident Bancorp vs. First Financial Northwest | Provident Bancorp vs. First Northwest Bancorp |
| Commerzbank vs. IF Bancorp | Commerzbank vs. Home Bancorp | Commerzbank vs. ConnectOne Bancorp | Commerzbank vs. First Northwest Bancorp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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