Correlation Between Sturgis Bancorp and Century Financial
Can any of the company-specific risk be diversified away by investing in both Sturgis Bancorp and Century 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 Sturgis Bancorp and Century Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sturgis Bancorp and Century Financial Corp, you can compare the effects of market volatilities on Sturgis Bancorp and Century 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 Sturgis Bancorp with a short position of Century Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sturgis Bancorp and Century Financial.
Diversification Opportunities for Sturgis Bancorp and Century Financial
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sturgis and Century is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sturgis Bancorp and Century Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Financial Corp and Sturgis 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 Sturgis Bancorp are associated (or correlated) with Century Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Financial Corp has no effect on the direction of Sturgis Bancorp i.e., Sturgis Bancorp and Century Financial go up and down completely randomly.
Pair Corralation between Sturgis Bancorp and Century Financial
If you would invest 3,300 in Century Financial Corp on August 29, 2024 and sell it today you would earn a total of 450.00 from holding Century Financial Corp or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Sturgis Bancorp vs. Century Financial Corp
Performance |
| Timeline |
| Sturgis Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Century Financial Corp |
Sturgis Bancorp and Century Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sturgis Bancorp and Century Financial
The main advantage of trading using opposite Sturgis Bancorp and Century Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sturgis Bancorp position performs unexpectedly, Century 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 Century Financial will offset losses from the drop in Century Financial's long position.| Sturgis Bancorp vs. FS Bancorp | Sturgis Bancorp vs. Eastern Michigan Financial | Sturgis Bancorp vs. Grand River Commerce | Sturgis Bancorp vs. Bank of Botetourt |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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