Correlation Between Suntrust Home and Bank of Commerce
Can any of the company-specific risk be diversified away by investing in both Suntrust Home and Bank of Commerce 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 Suntrust Home and Bank of Commerce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntrust Home Developers and Bank of Commerce, you can compare the effects of market volatilities on Suntrust Home and Bank of Commerce 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 Suntrust Home with a short position of Bank of Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntrust Home and Bank of Commerce.
Diversification Opportunities for Suntrust Home and Bank of Commerce
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Suntrust and Bank is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Suntrust Home Developers and Bank of Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Commerce and Suntrust Home 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 Suntrust Home Developers are associated (or correlated) with Bank of Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Commerce has no effect on the direction of Suntrust Home i.e., Suntrust Home and Bank of Commerce go up and down completely randomly.
Pair Corralation between Suntrust Home and Bank of Commerce
Assuming the 90 days trading horizon Suntrust Home Developers is expected to under-perform the Bank of Commerce. In addition to that, Suntrust Home is 2.31 times more volatile than Bank of Commerce. It trades about -0.11 of its total potential returns per unit of risk. Bank of Commerce is currently generating about -0.23 per unit of volatility. If you would invest 812.00 in Bank of Commerce on August 31, 2024 and sell it today you would lose (53.00) from holding Bank of Commerce or give up 6.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 59.09% |
| Values | Daily Returns |
Suntrust Home Developers vs. Bank of Commerce
Performance |
| Timeline |
| Suntrust Home Developers |
| Bank of Commerce |
Suntrust Home and Bank of Commerce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntrust Home and Bank of Commerce
The main advantage of trading using opposite Suntrust Home and Bank of Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntrust Home position performs unexpectedly, Bank of Commerce 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 Bank of Commerce will offset losses from the drop in Bank of Commerce's long position.| Suntrust Home vs. ATN Holdings | Suntrust Home vs. GT Capital Holdings | Suntrust Home vs. Allhome Corp | Suntrust Home vs. Jollibee Foods Corp |
| Bank of Commerce vs. Manila Mining Corp | Bank of Commerce vs. Apex Mining Co | Bank of Commerce vs. Lepanto Consolidated Mining | Bank of Commerce vs. Philex Mining Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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