Correlation Between Bar Harbor and SVB T

Can any of the company-specific risk be diversified away by investing in both Bar Harbor and SVB T 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 Bar Harbor and SVB T into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bar Harbor Bankshares and SVB T Corp, you can compare the effects of market volatilities on Bar Harbor and SVB T 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 Bar Harbor with a short position of SVB T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bar Harbor and SVB T.

Diversification Opportunities for Bar Harbor and SVB T

0.23

Correlation Coefficient

Bar Harbor  SVB T

Modest diversification

The 3 months correlation between Bar and SVB is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bar Harbor Bankshares and SVB T Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVB T Corp and Bar Harbor 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 Bar Harbor Bankshares are associated (or correlated) with SVB T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVB T Corp has no effect on the direction of Bar Harbor i.e., Bar Harbor and SVB T go up and down completely randomly.

Pair Corralation between Bar Harbor and SVB T

Considering the 90-day investment horizon Bar Harbor Bankshares is expected to under-perform the SVB T. In addition to that, Bar Harbor is 3.5 times more volatile than SVB T Corp. It trades about 0.0 of its total potential returns per unit of risk. SVB T Corp is currently generating about 0.04 per unit of volatility. If you would invest  4,225  in SVB T Corp on December 26, 2024 and sell it today you would earn a total of  50.00  from holding SVB T Corp or generate 1.18% return on investment over 90 days.

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

Bar Harbor Bankshares  vs.  SVB T Corp

Bar Harbor Bankshares

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bar Harbor Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, Bar Harbor is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SVB T Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SVB T Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, SVB T is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bar Harbor and SVB T

The main advantage of trading using opposite Bar Harbor and SVB T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bar Harbor position performs unexpectedly, SVB T 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 SVB T will offset losses from the drop in SVB T's long position.

The idea behind Bar Harbor Bankshares and SVB T Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.