Correlation Between Strategic Education and Summit Bank
Can any of the company-specific risk be diversified away by investing in both Strategic Education and Summit Bank 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 Strategic Education and Summit Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Education and Summit Bank Group, you can compare the effects of market volatilities on Strategic Education and Summit Bank 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 Strategic Education with a short position of Summit Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Education and Summit Bank.
Diversification Opportunities for Strategic Education and Summit Bank
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strategic and Summit is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Education and Summit Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Bank Group and Strategic Education 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 Strategic Education are associated (or correlated) with Summit Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bank Group has no effect on the direction of Strategic Education i.e., Strategic Education and Summit Bank go up and down completely randomly.
Pair Corralation between Strategic Education and Summit Bank
Given the investment horizon of 90 days Strategic Education is expected to under-perform the Summit Bank. But the stock apears to be less risky and, when comparing its historical volatility, Strategic Education is 3.95 times less risky than Summit Bank. The stock trades about -0.23 of its potential returns per unit of risk. The Summit Bank Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,430 in Summit Bank Group on October 9, 2024 and sell it today you would earn a total of 44.00 from holding Summit Bank Group or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Education vs. Summit Bank Group
Performance |
| Timeline |
| Strategic Education |
| Summit Bank Group |
Strategic Education and Summit Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Education and Summit Bank
The main advantage of trading using opposite Strategic Education and Summit Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Education position performs unexpectedly, Summit Bank 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 Summit Bank will offset losses from the drop in Summit Bank's long position.| Strategic Education vs. Element Solutions | Strategic Education vs. DoubleVerify Holdings | Strategic Education vs. CECO Environmental Corp | Strategic Education vs. American Public Education |
| Summit Bank vs. Savi Financial | Summit Bank vs. Pacific West Bancorp | Summit Bank vs. Commencement Bancorp | Summit Bank vs. Merchants Marine Bancorp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Transaction History View history of all your transactions and understand their impact on performance |