Correlation Between Sandy Spring and LINKBANCORP
Can any of the company-specific risk be diversified away by investing in both Sandy Spring and LINKBANCORP 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 LINKBANCORP 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 LINKBANCORP, you can compare the effects of market volatilities on Sandy Spring and LINKBANCORP 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 LINKBANCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandy Spring and LINKBANCORP.
Diversification Opportunities for Sandy Spring and LINKBANCORP
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sandy and LINKBANCORP is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sandy Spring Bancorp and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP 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 LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of Sandy Spring i.e., Sandy Spring and LINKBANCORP go up and down completely randomly.
Pair Corralation between Sandy Spring and LINKBANCORP
Given the investment horizon of 90 days Sandy Spring Bancorp is expected to generate 1.33 times more return on investment than LINKBANCORP. However, Sandy Spring is 1.33 times more volatile than LINKBANCORP. It trades about 0.0 of its potential returns per unit of risk. LINKBANCORP is currently generating about -0.19 per unit of risk. If you would invest 3,371 in Sandy Spring Bancorp on November 1, 2024 and sell it today you would lose (24.00) from holding Sandy Spring Bancorp or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandy Spring Bancorp vs. LINKBANCORP
Performance |
| Timeline |
| Sandy Spring Bancorp |
| LINKBANCORP |
Sandy Spring and LINKBANCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandy Spring and LINKBANCORP
The main advantage of trading using opposite Sandy Spring and LINKBANCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandy Spring position performs unexpectedly, LINKBANCORP 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 LINKBANCORP will offset losses from the drop in LINKBANCORP'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 |
| LINKBANCORP vs. Home Federal Bancorp | LINKBANCORP vs. Lake Shore Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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