Correlation Between First IC and Susquehanna Community

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

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

Diversification Opportunities for First IC and Susquehanna Community

-0.21

Correlation Coefficient

First IC  Susquehanna Community

Very good diversification

The 3 months correlation between First and Susquehanna is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding First IC and Susquehanna Community Financia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Susquehanna Community and First IC 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 First IC are associated (or correlated) with Susquehanna Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Susquehanna Community has no effect on the direction of First IC i.e., First IC and Susquehanna Community go up and down completely randomly.

Pair Corralation between First IC and Susquehanna Community

Given the investment horizon of 90 days First IC is expected to under-perform the Susquehanna Community. But the pink sheet apears to be less risky and, when comparing its historical volatility, First IC is 19.74 times less risky than Susquehanna Community. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Susquehanna Community Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,121  in Susquehanna Community Financial on September 3, 2024 and sell it today you would earn a total of  154.00  from holding Susquehanna Community Financial or generate 13.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

First IC  vs.  Susquehanna Community Financia

First IC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Susquehanna Community

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Susquehanna Community Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Susquehanna Community reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First IC and Susquehanna Community

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

The idea behind First IC and Susquehanna Community Financial 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..