Correlation Between Burke Herbert and Susquehanna Community

Can any of the company-specific risk be diversified away by investing in both Burke Herbert and Susquehanna Community 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 Burke Herbert and Susquehanna Community into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Burke Herbert and Susquehanna Community

0.26

Correlation Coefficient

Burke Herbert  Susquehanna Community

Modest diversification

The 3 months correlation between Burke and Susquehanna is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Burke Herbert Financial and Susquehanna Community Financia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Susquehanna Community and Burke Herbert 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 Burke Herbert Financial are associated (or correlated) with Susquehanna Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Susquehanna Community has no effect on the direction of Burke Herbert i.e., Burke Herbert and Susquehanna Community go up and down completely randomly.

Pair Corralation between Burke Herbert and Susquehanna Community

Given the investment horizon of 90 days Burke Herbert Financial is expected to under-perform the Susquehanna Community. In addition to that, Burke Herbert is 2.58 times more volatile than Susquehanna Community Financial. It trades about -0.1 of its total potential returns per unit of risk. Susquehanna Community Financial is currently generating about -0.19 per unit of volatility. If you would invest  1,270  in Susquehanna Community Financial on December 30, 2024 and sell it today you would lose (90.00) from holding Susquehanna Community Financial or give up 7.09% of portfolio value over 90 days.

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

Burke Herbert Financial  vs.  Susquehanna Community Financia

Burke Herbert Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Burke Herbert Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Susquehanna Community

Risk-Adjusted Performance

Very Weak

Over the last 90 days Susquehanna Community Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Burke Herbert and Susquehanna Community

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

The idea behind Burke Herbert Financial and Susquehanna Community 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.