Correlation Between Community Bankers and Grand River
Can any of the company-specific risk be diversified away by investing in both Community Bankers and Grand River 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 Community Bankers and Grand River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community Bankers and Grand River Commerce, you can compare the effects of market volatilities on Community Bankers and Grand River 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 Community Bankers with a short position of Grand River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community Bankers and Grand River.
Diversification Opportunities for Community Bankers and Grand River
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Community and Grand is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Community Bankers and Grand River Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand River Commerce and Community Bankers 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 Community Bankers are associated (or correlated) with Grand River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand River Commerce has no effect on the direction of Community Bankers i.e., Community Bankers and Grand River go up and down completely randomly.
Pair Corralation between Community Bankers and Grand River
Given the investment horizon of 90 days Community Bankers is expected to generate 0.55 times more return on investment than Grand River. However, Community Bankers is 1.8 times less risky than Grand River. It trades about 0.14 of its potential returns per unit of risk. Grand River Commerce is currently generating about 0.0 per unit of risk. If you would invest 412.00 in Community Bankers on September 13, 2024 and sell it today you would earn a total of 54.00 from holding Community Bankers or generate 13.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Community Bankers vs. Grand River Commerce
Performance |
Timeline |
Community Bankers |
Grand River Commerce |
Community Bankers and Grand River Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Community Bankers and Grand River
The main advantage of trading using opposite Community Bankers and Grand River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community Bankers position performs unexpectedly, Grand River 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 Grand River will offset losses from the drop in Grand River's long position.Community Bankers vs. PT Bank Rakyat | Community Bankers vs. Morningstar Unconstrained Allocation | Community Bankers vs. Bondbloxx ETF Trust | Community Bankers vs. Spring Valley Acquisition |
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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.
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