Correlation Between Southern Banc and Parke Bancorp
Can any of the company-specific risk be diversified away by investing in both Southern Banc and Parke Bancorp 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 Southern Banc and Parke Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Banc and Parke Bancorp, you can compare the effects of market volatilities on Southern Banc and Parke Bancorp 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 Southern Banc with a short position of Parke Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Banc and Parke Bancorp.
Diversification Opportunities for Southern Banc and Parke Bancorp
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Southern and Parke is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Southern Banc and Parke Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parke Bancorp and Southern Banc 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 Southern Banc are associated (or correlated) with Parke Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parke Bancorp has no effect on the direction of Southern Banc i.e., Southern Banc and Parke Bancorp go up and down completely randomly.
Pair Corralation between Southern Banc and Parke Bancorp
If you would invest 1,708 in Parke Bancorp on September 14, 2024 and sell it today you would earn a total of 526.00 from holding Parke Bancorp or generate 30.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.37% |
| Values | Daily Returns |
Southern Banc vs. Parke Bancorp
Performance |
| Timeline |
| Southern Banc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Parke Bancorp |
Southern Banc and Parke Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Banc and Parke Bancorp
The main advantage of trading using opposite Southern Banc and Parke Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Banc position performs unexpectedly, Parke Bancorp 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 Parke Bancorp will offset losses from the drop in Parke Bancorp's long position.| Southern Banc vs. 1895 of Wisconsin | Southern Banc vs. OptimumBank Holdings | Southern Banc vs. First National Bank | Southern Banc vs. CNB Financial |
| Parke Bancorp vs. Sound Financial Bancorp | Parke Bancorp vs. Finward Bancorp | Parke Bancorp vs. Franklin Financial Services | Parke Bancorp vs. Community West 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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