Correlation Between AmeriServ Financial and 1ST SUMMIT

Can any of the company-specific risk be diversified away by investing in both AmeriServ Financial and 1ST SUMMIT 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 AmeriServ Financial and 1ST SUMMIT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AmeriServ Financial and 1ST SUMMIT BANCORP, you can compare the effects of market volatilities on AmeriServ Financial and 1ST SUMMIT 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 AmeriServ Financial with a short position of 1ST SUMMIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmeriServ Financial and 1ST SUMMIT.

Diversification Opportunities for AmeriServ Financial and 1ST SUMMIT

0.49

Correlation Coefficient

AmeriServ Financial  1ST SUMMIT

Very weak diversification

The 3 months correlation between AmeriServ and 1ST is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding AmeriServ Financial and 1ST SUMMIT BANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1ST SUMMIT BANCORP and AmeriServ Financial 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 AmeriServ Financial are associated (or correlated) with 1ST SUMMIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1ST SUMMIT BANCORP has no effect on the direction of AmeriServ Financial i.e., AmeriServ Financial and 1ST SUMMIT go up and down completely randomly.

Pair Corralation between AmeriServ Financial and 1ST SUMMIT

Given the investment horizon of 90 days AmeriServ Financial is expected to generate 1.91 times more return on investment than 1ST SUMMIT. However, AmeriServ Financial is 1.91 times more volatile than 1ST SUMMIT BANCORP. It trades about -0.07 of its potential returns per unit of risk. 1ST SUMMIT BANCORP is currently generating about -0.32 per unit of risk. If you would invest  268.00  in AmeriServ Financial on December 2, 2024 and sell it today you would lose (8.00) from holding AmeriServ Financial or give up 2.99% of portfolio value over 90 days.

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

AmeriServ Financial  vs.  1ST SUMMIT BANCORP

AmeriServ Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days AmeriServ Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, AmeriServ Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

1ST SUMMIT BANCORP

Risk-Adjusted Performance

Very Weak

Over the last 90 days 1ST SUMMIT BANCORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's primary 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.

Pair Trading with AmeriServ Financial and 1ST SUMMIT

The main advantage of trading using opposite AmeriServ Financial and 1ST SUMMIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmeriServ Financial position performs unexpectedly, 1ST SUMMIT 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 1ST SUMMIT will offset losses from the drop in 1ST SUMMIT's long position.

The idea behind AmeriServ Financial and 1ST SUMMIT 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.