Correlation Between Provident Bancorp and Cullman Bancorp
Can any of the company-specific risk be diversified away by investing in both Provident Bancorp and Cullman Bancorp 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 Cullman Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Provident Bancorp and Cullman Bancorp, you can compare the effects of market volatilities on Provident Bancorp and Cullman Bancorp 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 Cullman Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provident Bancorp and Cullman Bancorp.
Diversification Opportunities for Provident Bancorp and Cullman Bancorp
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Provident and Cullman is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Provident Bancorp and Cullman Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullman Bancorp 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 Cullman Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullman Bancorp has no effect on the direction of Provident Bancorp i.e., Provident Bancorp and Cullman Bancorp go up and down completely randomly.
Pair Corralation between Provident Bancorp and Cullman Bancorp
If you would invest 1,037 in Provident Bancorp on September 1, 2024 and sell it today you would earn a total of 111.00 from holding Provident Bancorp or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Provident Bancorp vs. Cullman Bancorp
Performance |
| Timeline |
| Provident Bancorp |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Provident Bancorp and Cullman Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Provident Bancorp and Cullman Bancorp
The main advantage of trading using opposite Provident Bancorp and Cullman Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provident Bancorp position performs unexpectedly, Cullman Bancorp 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 Cullman Bancorp will offset losses from the drop in Cullman Bancorp'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 |
| Cullman Bancorp vs. Home Federal Bancorp | Cullman Bancorp vs. Lake Shore Bancorp | Cullman Bancorp vs. Community West Bancshares | Cullman Bancorp vs. Magyar 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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