Correlation Between Apollo Bancorp and AmeriServ Financial

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

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

Diversification Opportunities for Apollo Bancorp and AmeriServ Financial

-0.43

Correlation Coefficient

Apollo Bancorp  AmeriServ Financial

Very good diversification

The 3 months correlation between Apollo and AmeriServ is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Bancorp and AmeriServ Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmeriServ Financial and Apollo 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 Apollo Bancorp are associated (or correlated) with AmeriServ Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmeriServ Financial has no effect on the direction of Apollo Bancorp i.e., Apollo Bancorp and AmeriServ Financial go up and down completely randomly.

Pair Corralation between Apollo Bancorp and AmeriServ Financial

Given the investment horizon of 90 days Apollo Bancorp is expected to under-perform the AmeriServ Financial. But the pink sheet apears to be less risky and, when comparing its historical volatility, Apollo Bancorp is 2.32 times less risky than AmeriServ Financial. The pink sheet trades about -0.06 of its potential returns per unit of risk. The AmeriServ Financial is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  265.00  in AmeriServ Financial on September 5, 2024 and sell it today you would earn a total of  16.00  from holding AmeriServ Financial or generate 6.04% return on investment over 90 days.

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

Apollo Bancorp  vs.  AmeriServ Financial

Apollo Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Apollo Bancorp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

AmeriServ Financial

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Apollo Bancorp and AmeriServ Financial

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

The idea behind Apollo Bancorp and AmeriServ Financial 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.