Correlation Between Equity Bancshares, and Customers Bancorp

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

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

Diversification Opportunities for Equity Bancshares, and Customers Bancorp

0.9

Correlation Coefficient

Equity Bancshares,  Customers Bancorp

Almost no diversification

The 3 months correlation between Equity and Customers is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and Customers Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Customers Bancorp 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 Customers Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Customers Bancorp has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and Customers Bancorp go up and down completely randomly.

Pair Corralation between Equity Bancshares, and Customers Bancorp

Given the investment horizon of 90 days Equity Bancshares, is expected to generate 0.65 times more return on investment than Customers Bancorp. However, Equity Bancshares, is 1.55 times less risky than Customers Bancorp. It trades about 0.09 of its potential returns per unit of risk. Customers Bancorp is currently generating about 0.01 per unit of risk. If you would invest  3,266  in Equity Bancshares, on September 13, 2024 and sell it today you would earn a total of  1,501  from holding Equity Bancshares, or generate 45.96% 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.  Customers Bancorp

Equity Bancshares,

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Bancshares, are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Equity Bancshares, disclosed solid returns over the last few months and may actually be approaching a breakup point.

Customers Bancorp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Customers Bancorp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental drivers, Customers Bancorp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Equity Bancshares, and Customers Bancorp

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

The idea behind Equity Bancshares, and Customers Bancorp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.