Correlation Between 1ST SUMMIT and Delhi Bank

Can any of the company-specific risk be diversified away by investing in both 1ST SUMMIT and Delhi Bank 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 1ST SUMMIT and Delhi Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1ST SUMMIT BANCORP and Delhi Bank Corp, you can compare the effects of market volatilities on 1ST SUMMIT and Delhi Bank 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 1ST SUMMIT with a short position of Delhi Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1ST SUMMIT and Delhi Bank.

Diversification Opportunities for 1ST SUMMIT and Delhi Bank

-0.72

Correlation Coefficient

1ST SUMMIT  Delhi Bank

Pay attention - limited upside

The 3 months correlation between 1ST and Delhi is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding 1ST SUMMIT BANCORP and Delhi Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delhi Bank Corp and 1ST SUMMIT 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 1ST SUMMIT BANCORP are associated (or correlated) with Delhi Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delhi Bank Corp has no effect on the direction of 1ST SUMMIT i.e., 1ST SUMMIT and Delhi Bank go up and down completely randomly.

Pair Corralation between 1ST SUMMIT and Delhi Bank

Given the investment horizon of 90 days 1ST SUMMIT BANCORP is expected to under-perform the Delhi Bank. In addition to that, 1ST SUMMIT is 3.56 times more volatile than Delhi Bank Corp. It trades about -0.12 of its total potential returns per unit of risk. Delhi Bank Corp is currently generating about 0.21 per unit of volatility. If you would invest  2,050  in Delhi Bank Corp on December 26, 2024 and sell it today you would earn a total of  57.00  from holding Delhi Bank Corp or generate 2.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

1ST SUMMIT BANCORP  vs.  Delhi Bank Corp

1ST SUMMIT BANCORP

Risk-Adjusted Performance

Very Weak

Over the last 90 days 1ST SUMMIT BANCORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's primary indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Delhi Bank Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delhi Bank Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Delhi Bank is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 1ST SUMMIT and Delhi Bank

The main advantage of trading using opposite 1ST SUMMIT and Delhi Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1ST SUMMIT position performs unexpectedly, Delhi Bank 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 Delhi Bank will offset losses from the drop in Delhi Bank's long position.

The idea behind 1ST SUMMIT BANCORP and Delhi Bank Corp 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.