Correlation Between TrustCo Bank and Sierra Bancorp
Can any of the company-specific risk be diversified away by investing in both TrustCo Bank and Sierra 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 TrustCo Bank and Sierra Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TrustCo Bank Corp and Sierra Bancorp, you can compare the effects of market volatilities on TrustCo Bank and Sierra 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 TrustCo Bank with a short position of Sierra Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of TrustCo Bank and Sierra Bancorp.
Diversification Opportunities for TrustCo Bank and Sierra Bancorp
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TrustCo and Sierra is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding TrustCo Bank Corp and Sierra Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Bancorp and TrustCo Bank 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 TrustCo Bank Corp are associated (or correlated) with Sierra Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Bancorp has no effect on the direction of TrustCo Bank i.e., TrustCo Bank and Sierra Bancorp go up and down completely randomly.
Pair Corralation between TrustCo Bank and Sierra Bancorp
Given the investment horizon of 90 days TrustCo Bank is expected to generate 1.35 times less return on investment than Sierra Bancorp. But when comparing it to its historical volatility, TrustCo Bank Corp is 1.37 times less risky than Sierra Bancorp. It trades about 0.13 of its potential returns per unit of risk. Sierra Bancorp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,037 in Sierra Bancorp on September 3, 2024 and sell it today you would earn a total of 1,110 from holding Sierra Bancorp or generate 54.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TrustCo Bank Corp vs. Sierra Bancorp
Performance |
| Timeline |
| TrustCo Bank Corp |
| Sierra Bancorp |
TrustCo Bank and Sierra Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TrustCo Bank and Sierra Bancorp
The main advantage of trading using opposite TrustCo Bank and Sierra Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TrustCo Bank position performs unexpectedly, Sierra 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 Sierra Bancorp will offset losses from the drop in Sierra Bancorp's long position.| TrustCo Bank vs. Southern Missouri Bancorp | TrustCo Bank vs. IF Bancorp | TrustCo Bank vs. Colony Bankcorp | TrustCo Bank vs. Old Point Financial |
| Sierra Bancorp vs. JPMorgan Chase Co | Sierra Bancorp vs. Citigroup | Sierra Bancorp vs. Wells Fargo | Sierra Bancorp vs. Toronto Dominion Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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