Correlation Between Andover Bancorp and Bank Of Cyprus

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

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

Diversification Opportunities for Andover Bancorp and Bank Of Cyprus

0.26

Correlation Coefficient

Andover Bancorp  Bank Of Cyprus

Modest diversification

The 3 months correlation between Andover and Bank is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Andover Bancorp and Bank Of Cyprus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Of Cyprus and Andover Bancorp 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 Andover Bancorp are associated (or correlated) with Bank Of Cyprus. 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 Cyprus has no effect on the direction of Andover Bancorp i.e., Andover Bancorp and Bank Of Cyprus go up and down completely randomly.

Pair Corralation between Andover Bancorp and Bank Of Cyprus

Given the investment horizon of 90 days Andover Bancorp is expected to generate 2.23 times less return on investment than Bank Of Cyprus. In addition to that, Andover Bancorp is 1.31 times more volatile than Bank Of Cyprus. It trades about 0.02 of its total potential returns per unit of risk. Bank Of Cyprus is currently generating about 0.07 per unit of volatility. If you would invest  389.00  in Bank Of Cyprus on September 30, 2024 and sell it today you would earn a total of  64.00  from holding Bank Of Cyprus or generate 16.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Andover Bancorp  vs.  Bank Of Cyprus

Andover Bancorp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Andover Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Andover Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bank Of Cyprus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Of Cyprus has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Bank Of Cyprus is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Andover Bancorp and Bank Of Cyprus

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

The idea behind Andover Bancorp and Bank Of Cyprus 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.