Correlation Between Summit Bancshares and US Century
Can any of the company-specific risk be diversified away by investing in both Summit Bancshares and US Century 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 Bancshares and US Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Bancshares and US Century Bank, you can compare the effects of market volatilities on Summit Bancshares and US Century 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 Bancshares with a short position of US Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Bancshares and US Century.
Diversification Opportunities for Summit Bancshares and US Century
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Summit and USCB is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Summit Bancshares and US Century Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Century Bank and Summit Bancshares 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 Bancshares are associated (or correlated) with US Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Century Bank has no effect on the direction of Summit Bancshares i.e., Summit Bancshares and US Century go up and down completely randomly.
Pair Corralation between Summit Bancshares and US Century
Given the investment horizon of 90 days Summit Bancshares is expected to generate 2.21 times less return on investment than US Century. In addition to that, Summit Bancshares is 1.04 times more volatile than US Century Bank. It trades about 0.05 of its total potential returns per unit of risk. US Century Bank is currently generating about 0.12 per unit of volatility. If you would invest 1,634 in US Century Bank on December 11, 2024 and sell it today you would earn a total of 147.00 from holding US Century Bank or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Bancshares vs. US Century Bank
Performance |
| Timeline |
| Summit Bancshares |
| US Century Bank |
Summit Bancshares and US Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Bancshares and US Century
The main advantage of trading using opposite Summit Bancshares and US Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Bancshares position performs unexpectedly, US Century 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 US Century will offset losses from the drop in US Century's long position.| Summit Bancshares vs. Pioneer Bankcorp | Summit Bancshares vs. Liberty Northwest Bancorp | Summit Bancshares vs. First Community | Summit Bancshares vs. Coeur dAlene Bancorp |
| US Century vs. Bank of San | US Century vs. Pioneer Bankcorp | US Century vs. Liberty Northwest Bancorp | US Century vs. Summit Bancshares |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |