Correlation Between Amalgamated Bank and Ameris Bancorp

Can any of the company-specific risk be diversified away by investing in both Amalgamated Bank and Ameris 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 Amalgamated Bank and Ameris Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amalgamated Bank and Ameris Bancorp, you can compare the effects of market volatilities on Amalgamated Bank and Ameris 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 Amalgamated Bank with a short position of Ameris Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amalgamated Bank and Ameris Bancorp.

Diversification Opportunities for Amalgamated Bank and Ameris Bancorp

0.85

Correlation Coefficient

Amalgamated Bank  Ameris Bancorp

Very poor diversification

The 3 months correlation between Amalgamated and Ameris is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Amalgamated Bank and Ameris Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameris Bancorp and Amalgamated 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 Amalgamated Bank are associated (or correlated) with Ameris Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameris Bancorp has no effect on the direction of Amalgamated Bank i.e., Amalgamated Bank and Ameris Bancorp go up and down completely randomly.

Pair Corralation between Amalgamated Bank and Ameris Bancorp

Given the investment horizon of 90 days Amalgamated Bank is expected to under-perform the Ameris Bancorp. In addition to that, Amalgamated Bank is 1.28 times more volatile than Ameris Bancorp. It trades about -0.1 of its total potential returns per unit of risk. Ameris Bancorp is currently generating about -0.07 per unit of volatility. If you would invest  6,280  in Ameris Bancorp on December 22, 2024 and sell it today you would lose (502.00) from holding Ameris Bancorp or give up 7.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Amalgamated Bank  vs.  Ameris Bancorp

Amalgamated Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amalgamated Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ameris Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ameris Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Amalgamated Bank and Ameris Bancorp

The main advantage of trading using opposite Amalgamated Bank and Ameris Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amalgamated Bank position performs unexpectedly, Ameris 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 Ameris Bancorp will offset losses from the drop in Ameris Bancorp's long position.

The idea behind Amalgamated Bank and Ameris Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.