Correlation Between Tectonic Financial and Customers Bancorp
Can any of the company-specific risk be diversified away by investing in both Tectonic Financial and Customers 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 Tectonic Financial and Customers Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tectonic Financial PR and Customers Bancorp, you can compare the effects of market volatilities on Tectonic Financial and Customers 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 Tectonic Financial with a short position of Customers Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and Customers Bancorp.
Diversification Opportunities for Tectonic Financial and Customers Bancorp
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tectonic and Customers is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR and Customers Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Customers Bancorp and Tectonic Financial 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 Tectonic Financial PR are associated (or correlated) with Customers Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Customers Bancorp has no effect on the direction of Tectonic Financial i.e., Tectonic Financial and Customers Bancorp go up and down completely randomly.
Pair Corralation between Tectonic Financial and Customers Bancorp
Assuming the 90 days horizon Tectonic Financial is expected to generate 1.26 times less return on investment than Customers Bancorp. In addition to that, Tectonic Financial is 2.37 times more volatile than Customers Bancorp. It trades about 0.07 of its total potential returns per unit of risk. Customers Bancorp is currently generating about 0.22 per unit of volatility. If you would invest 2,567 in Customers Bancorp on August 27, 2024 and sell it today you would earn a total of 58.00 from holding Customers Bancorp or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tectonic Financial PR vs. Customers Bancorp
Performance |
| Timeline |
| Tectonic Financial |
| Customers Bancorp |
Tectonic Financial and Customers Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tectonic Financial and Customers Bancorp
The main advantage of trading using opposite Tectonic Financial and Customers Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic Financial position performs unexpectedly, Customers 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 Customers Bancorp will offset losses from the drop in Customers Bancorp's long position.| Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Absa Group Limited |
| Customers Bancorp vs. Tectonic Financial PR | Customers Bancorp vs. First Guaranty Bancshares | Customers Bancorp vs. First Merchants | Customers Bancorp vs. Metropolitan Bank Holding |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |