Correlation Between Sandy Spring and ConnectOne Bancorp
Can any of the company-specific risk be diversified away by investing in both Sandy Spring and ConnectOne 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 Sandy Spring and ConnectOne Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sandy Spring Bancorp and ConnectOne Bancorp, you can compare the effects of market volatilities on Sandy Spring and ConnectOne 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 Sandy Spring with a short position of ConnectOne Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandy Spring and ConnectOne Bancorp.
Diversification Opportunities for Sandy Spring and ConnectOne Bancorp
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sandy and ConnectOne is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sandy Spring Bancorp and ConnectOne Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConnectOne Bancorp and Sandy Spring 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 Sandy Spring Bancorp are associated (or correlated) with ConnectOne Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConnectOne Bancorp has no effect on the direction of Sandy Spring i.e., Sandy Spring and ConnectOne Bancorp go up and down completely randomly.
Pair Corralation between Sandy Spring and ConnectOne Bancorp
Given the investment horizon of 90 days Sandy Spring Bancorp is expected to generate 0.95 times more return on investment than ConnectOne Bancorp. However, Sandy Spring Bancorp is 1.05 times less risky than ConnectOne Bancorp. It trades about 0.11 of its potential returns per unit of risk. ConnectOne Bancorp is currently generating about 0.07 per unit of risk. If you would invest 2,065 in Sandy Spring Bancorp on August 24, 2024 and sell it today you would earn a total of 1,652 from holding Sandy Spring Bancorp or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandy Spring Bancorp vs. ConnectOne Bancorp
Performance |
| Timeline |
| Sandy Spring Bancorp |
| ConnectOne Bancorp |
Sandy Spring and ConnectOne Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandy Spring and ConnectOne Bancorp
The main advantage of trading using opposite Sandy Spring and ConnectOne Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandy Spring position performs unexpectedly, ConnectOne 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 ConnectOne Bancorp will offset losses from the drop in ConnectOne Bancorp's long position.| Sandy Spring vs. Northrim BanCorp | Sandy Spring vs. Provident Financial Services | Sandy Spring vs. Community Trust Bancorp | Sandy Spring vs. First Interstate BancSystem |
| ConnectOne Bancorp vs. Rhinebeck Bancorp | ConnectOne Bancorp vs. Home Bancorp | ConnectOne Bancorp vs. Parke Bancorp | ConnectOne Bancorp vs. Great Southern 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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