Correlation Between ConnectOne Bancorp and PBTS Old

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

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

Diversification Opportunities for ConnectOne Bancorp and PBTS Old

-0.78

Correlation Coefficient

ConnectOne Bancorp  PBTS Old

Pay attention - limited upside

The 3 months correlation between ConnectOne and PBTS is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding ConnectOne Bancorp and PBTS Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBTS Old and ConnectOne 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 ConnectOne Bancorp are associated (or correlated) with PBTS Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PBTS Old has no effect on the direction of ConnectOne Bancorp i.e., ConnectOne Bancorp and PBTS Old go up and down completely randomly.

Pair Corralation between ConnectOne Bancorp and PBTS Old

Assuming the 90 days horizon ConnectOne Bancorp is expected to generate 118.01 times less return on investment than PBTS Old. But when comparing it to its historical volatility, ConnectOne Bancorp is 43.61 times less risky than PBTS Old. It trades about 0.02 of its potential returns per unit of risk. PBTS Old is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  363.00  in PBTS Old on October 13, 2024 and sell it today you would lose (333.00) from holding PBTS Old or give up 91.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	25.6%
Values	Daily Returns

ConnectOne Bancorp  vs.  PBTS Old

ConnectOne Bancorp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ConnectOne Bancorp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, ConnectOne Bancorp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PBTS Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PBTS Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PBTS Old is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ConnectOne Bancorp and PBTS Old

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

The idea behind ConnectOne Bancorp and PBTS Old 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.