Correlation Between Summit Bank and Graham Holdings
Can any of the company-specific risk be diversified away by investing in both Summit Bank and Graham Holdings 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 Graham Holdings 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 Graham Holdings Co, you can compare the effects of market volatilities on Summit Bank and Graham Holdings 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 Graham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Bank and Graham Holdings.
Diversification Opportunities for Summit Bank and Graham Holdings
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Summit and Graham is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Summit Bank Group and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings 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 Graham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham Holdings has no effect on the direction of Summit Bank i.e., Summit Bank and Graham Holdings go up and down completely randomly.
Pair Corralation between Summit Bank and Graham Holdings
Given the investment horizon of 90 days Summit Bank Group is expected to generate 3.64 times more return on investment than Graham Holdings. However, Summit Bank is 3.64 times more volatile than Graham Holdings Co. It trades about 0.05 of its potential returns per unit of risk. Graham Holdings Co is currently generating about -0.22 per unit of risk. If you would invest 1,430 in Summit Bank Group on October 9, 2024 and sell it today you would earn a total of 44.00 from holding Summit Bank Group or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Bank Group vs. Graham Holdings Co
Performance |
| Timeline |
| Summit Bank Group |
| Graham Holdings |
Summit Bank and Graham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Bank and Graham Holdings
The main advantage of trading using opposite Summit Bank and Graham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Bank position performs unexpectedly, Graham Holdings 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 Graham Holdings will offset losses from the drop in Graham Holdings' long position.| Summit Bank vs. Savi Financial | Summit Bank vs. Pacific West Bancorp | Summit Bank vs. Commencement Bancorp | Summit Bank vs. Merchants Marine Bancorp |
| Graham Holdings vs. Cable One | Graham Holdings vs. Adtalem Global Education | Graham Holdings vs. Axalta Coating Systems | Graham Holdings vs. Madison Square Garden |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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