Correlation Between BEO Bancorp and Bank Utica

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

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

Diversification Opportunities for BEO Bancorp and Bank Utica

-0.24

Correlation Coefficient

BEO Bancorp  Bank Utica

Very good diversification

The 3 months correlation between BEO and Bank is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding BEO Bancorp and Bank Utica Ny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Utica Ny and BEO 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 BEO Bancorp are associated (or correlated) with Bank Utica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Utica Ny has no effect on the direction of BEO Bancorp i.e., BEO Bancorp and Bank Utica go up and down completely randomly.

Pair Corralation between BEO Bancorp and Bank Utica

Given the investment horizon of 90 days BEO Bancorp is expected to generate 1.11 times more return on investment than Bank Utica. However, BEO Bancorp is 1.11 times more volatile than Bank Utica Ny. It trades about 0.16 of its potential returns per unit of risk. Bank Utica Ny is currently generating about 0.07 per unit of risk. If you would invest  4,983  in BEO Bancorp on December 3, 2024 and sell it today you would earn a total of  3,242  from holding BEO Bancorp or generate 65.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.21%
Values	Daily Returns

BEO Bancorp  vs.  Bank Utica Ny

BEO Bancorp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BEO Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, BEO Bancorp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bank Utica Ny

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Utica Ny has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with BEO Bancorp and Bank Utica

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

The idea behind BEO Bancorp and Bank Utica Ny 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.