Correlation Between Summit Bank and CP All
Can any of the company-specific risk be diversified away by investing in both Summit Bank and CP All 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 Summit Bank and CP All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Bank Group and CP All PCL, you can compare the effects of market volatilities on Summit Bank and CP All 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 Summit Bank with a short position of CP All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Bank and CP All.
Diversification Opportunities for Summit Bank and CP All
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Summit and CPPCY is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Summit Bank Group and CP All PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP All PCL and Summit Bank 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 Summit Bank Group are associated (or correlated) with CP All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP All PCL has no effect on the direction of Summit Bank i.e., Summit Bank and CP All go up and down completely randomly.
Pair Corralation between Summit Bank and CP All
Given the investment horizon of 90 days Summit Bank Group is expected to under-perform the CP All. But the pink sheet apears to be less risky and, when comparing its historical volatility, Summit Bank Group is 1.58 times less risky than CP All. The pink sheet trades about -0.32 of its potential returns per unit of risk. The CP All PCL is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,715 in CP All PCL on October 25, 2024 and sell it today you would earn a total of 13.00 from holding CP All PCL or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Bank Group vs. CP All PCL
Performance |
| Timeline |
| Summit Bank Group |
| CP All PCL |
Summit Bank and CP All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Bank and CP All
The main advantage of trading using opposite Summit Bank and CP All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Bank position performs unexpectedly, CP All 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 CP All will offset losses from the drop in CP All's long position.| Summit Bank vs. Savi Financial | Summit Bank vs. Pacific West Bancorp | Summit Bank vs. Commencement Bancorp | Summit Bank vs. Merchants Marine Bancorp |
| CP All vs. Summit Bank Group | CP All vs. BRP Inc | CP All vs. Mattel Inc | CP All vs. Juniata Valley Financial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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