Correlation Between Equity Bancshares, and Banner

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

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

Diversification Opportunities for Equity Bancshares, and Banner

0.98

Correlation Coefficient

Equity Bancshares,  Banner

Almost no diversification

The 3 months correlation between Equity and Banner is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and Banner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banner and Equity Bancshares, 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 Equity Bancshares, are associated (or correlated) with Banner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banner has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and Banner go up and down completely randomly.

Pair Corralation between Equity Bancshares, and Banner

Given the investment horizon of 90 days Equity Bancshares, is expected to generate 0.97 times more return on investment than Banner. However, Equity Bancshares, is 1.03 times less risky than Banner. It trades about 0.04 of its potential returns per unit of risk. Banner is currently generating about 0.03 per unit of risk. If you would invest  3,143  in Equity Bancshares, on September 28, 2024 and sell it today you would earn a total of  1,144  from holding Equity Bancshares, or generate 36.4% return on investment over 90 days.

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

Equity Bancshares,  vs.  Banner

Equity Bancshares,

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Bancshares, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Equity Bancshares, is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Banner

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Banner are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Banner reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Equity Bancshares, and Banner

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

The idea behind Equity Bancshares, and Banner 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.