Correlation Between ST Bancorp and Sandy Spring
Can any of the company-specific risk be diversified away by investing in both ST Bancorp and Sandy Spring 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 ST Bancorp and Sandy Spring into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ST Bancorp and Sandy Spring Bancorp, you can compare the effects of market volatilities on ST Bancorp and Sandy Spring 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 ST Bancorp with a short position of Sandy Spring. Check out your portfolio center. Please also check ongoing floating volatility patterns of ST Bancorp and Sandy Spring.
Diversification Opportunities for ST Bancorp and Sandy Spring
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STBA and Sandy is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ST Bancorp and Sandy Spring Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandy Spring Bancorp and ST 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 ST Bancorp are associated (or correlated) with Sandy Spring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandy Spring Bancorp has no effect on the direction of ST Bancorp i.e., ST Bancorp and Sandy Spring go up and down completely randomly.
Pair Corralation between ST Bancorp and Sandy Spring
Given the investment horizon of 90 days ST Bancorp is expected to generate 1.18 times less return on investment than Sandy Spring. But when comparing it to its historical volatility, ST Bancorp is 1.13 times less risky than Sandy Spring. It trades about 0.06 of its potential returns per unit of risk. Sandy Spring Bancorp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,345 in Sandy Spring Bancorp on August 31, 2024 and sell it today you would earn a total of 1,423 from holding Sandy Spring Bancorp or generate 60.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ST Bancorp vs. Sandy Spring Bancorp
Performance |
| Timeline |
| ST Bancorp |
| Sandy Spring Bancorp |
ST Bancorp and Sandy Spring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ST Bancorp and Sandy Spring
The main advantage of trading using opposite ST Bancorp and Sandy Spring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ST Bancorp position performs unexpectedly, Sandy Spring 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 Sandy Spring will offset losses from the drop in Sandy Spring's long position.| ST Bancorp vs. CrossFirst Bankshares | ST Bancorp vs. Enterprise Financial Services | ST Bancorp vs. The First Bancshares, | ST Bancorp vs. First Bancorp |
| Sandy Spring vs. Northrim BanCorp | Sandy Spring vs. Provident Financial Services | Sandy Spring vs. Community Trust Bancorp | Sandy Spring vs. First Interstate BancSystem |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |