Correlation Between Temecula Valley and ConnectOne Bancorp
Can any of the company-specific risk be diversified away by investing in both Temecula Valley and ConnectOne 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 Temecula Valley and ConnectOne Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Temecula Valley Bancorp and ConnectOne Bancorp, you can compare the effects of market volatilities on Temecula Valley and ConnectOne 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 Temecula Valley with a short position of ConnectOne Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Temecula Valley and ConnectOne Bancorp.
Diversification Opportunities for Temecula Valley and ConnectOne Bancorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Temecula and ConnectOne is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Temecula Valley Bancorp and ConnectOne Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConnectOne Bancorp and Temecula Valley 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 Temecula Valley Bancorp are associated (or correlated) with ConnectOne Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConnectOne Bancorp has no effect on the direction of Temecula Valley i.e., Temecula Valley and ConnectOne Bancorp go up and down completely randomly.
Pair Corralation between Temecula Valley and ConnectOne Bancorp
If you would invest 2,083 in ConnectOne Bancorp on September 4, 2024 and sell it today you would earn a total of 137.00 from holding ConnectOne Bancorp or generate 6.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 5.0% |
Values | Daily Returns |
Temecula Valley Bancorp vs. ConnectOne Bancorp
Performance |
Timeline |
Temecula Valley Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ConnectOne Bancorp |
Temecula Valley and ConnectOne Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Temecula Valley and ConnectOne Bancorp
The main advantage of trading using opposite Temecula Valley and ConnectOne Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Temecula Valley position performs unexpectedly, ConnectOne 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 ConnectOne Bancorp will offset losses from the drop in ConnectOne Bancorp's long position.Temecula Valley vs. ConnectOne Bancorp | Temecula Valley vs. OceanFirst Financial Corp | Temecula Valley vs. Huntington Bancshares Incorporated | Temecula Valley vs. Fifth Third Bancorp |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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