Correlation Between Sterling Bancorp and Bogota Financial
Can any of the company-specific risk be diversified away by investing in both Sterling Bancorp and Bogota Financial 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 Sterling Bancorp and Bogota Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Bancorp and Bogota Financial Corp, you can compare the effects of market volatilities on Sterling Bancorp and Bogota Financial 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 Sterling Bancorp with a short position of Bogota Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Bancorp and Bogota Financial.
Diversification Opportunities for Sterling Bancorp and Bogota Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sterling and Bogota is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Bancorp and Bogota Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bogota Financial Corp and Sterling 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 Sterling Bancorp are associated (or correlated) with Bogota Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bogota Financial Corp has no effect on the direction of Sterling Bancorp i.e., Sterling Bancorp and Bogota Financial go up and down completely randomly.
Pair Corralation between Sterling Bancorp and Bogota Financial
Considering the 90-day investment horizon Sterling Bancorp is expected to generate 0.53 times more return on investment than Bogota Financial. However, Sterling Bancorp is 1.88 times less risky than Bogota Financial. It trades about 0.0 of its potential returns per unit of risk. Bogota Financial Corp is currently generating about -0.04 per unit of risk. If you would invest 484.00 in Sterling Bancorp on November 1, 2024 and sell it today you would earn a total of 0.00 from holding Sterling Bancorp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Bancorp vs. Bogota Financial Corp
Performance |
| Timeline |
| Sterling Bancorp |
| Bogota Financial Corp |
Sterling Bancorp and Bogota Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Bancorp and Bogota Financial
The main advantage of trading using opposite Sterling Bancorp and Bogota Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Bancorp position performs unexpectedly, Bogota Financial 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 Bogota Financial will offset losses from the drop in Bogota Financial's long position.| Sterling Bancorp vs. Home Federal Bancorp | Sterling Bancorp vs. Lake Shore Bancorp | Sterling Bancorp vs. Magyar Bancorp | Sterling Bancorp vs. Franklin Financial Services |
| Bogota Financial vs. Home Federal Bancorp | Bogota Financial vs. First Financial Northwest | Bogota Financial vs. First Northwest Bancorp | Bogota Financial vs. First Capital |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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