Correlation Between Blackhawk Bancorp and Private Bancorp

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

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

Diversification Opportunities for Blackhawk Bancorp and Private Bancorp

0.57

Correlation Coefficient

Blackhawk Bancorp  Private Bancorp

Very weak diversification

The 3 months correlation between Blackhawk and Private is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Blackhawk Bancorp and Private Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Private Bancorp and Blackhawk 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 Blackhawk Bancorp are associated (or correlated) with Private Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Private Bancorp has no effect on the direction of Blackhawk Bancorp i.e., Blackhawk Bancorp and Private Bancorp go up and down completely randomly.

Pair Corralation between Blackhawk Bancorp and Private Bancorp

Given the investment horizon of 90 days Blackhawk Bancorp is expected to generate 1.07 times less return on investment than Private Bancorp. But when comparing it to its historical volatility, Blackhawk Bancorp is 1.23 times less risky than Private Bancorp. It trades about 0.07 of its potential returns per unit of risk. Private Bancorp of is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,260  in Private Bancorp of on September 2, 2024 and sell it today you would earn a total of  1,710  from holding Private Bancorp of or generate 52.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	31.05%
Values	Daily Returns

Blackhawk Bancorp  vs.  Private Bancorp of

Blackhawk Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Private Bancorp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Private Bancorp of are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Private Bancorp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackhawk Bancorp and Private Bancorp

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

The idea behind Blackhawk Bancorp and Private Bancorp of 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.