Correlation Between Glen Burnie and First Keystone

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

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

Diversification Opportunities for Glen Burnie and First Keystone

0.73

Correlation Coefficient

Glen Burnie  First Keystone

Poor diversification

The 3 months correlation between Glen and First is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Glen Burnie Bancorp and First Keystone Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Keystone Corp and Glen Burnie 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 Glen Burnie Bancorp are associated (or correlated) with First Keystone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Keystone Corp has no effect on the direction of Glen Burnie i.e., Glen Burnie and First Keystone go up and down completely randomly.

Pair Corralation between Glen Burnie and First Keystone

Given the investment horizon of 90 days Glen Burnie Bancorp is expected to generate 2.21 times more return on investment than First Keystone. However, Glen Burnie is 2.21 times more volatile than First Keystone Corp. It trades about 0.02 of its potential returns per unit of risk. First Keystone Corp is currently generating about -0.21 per unit of risk. If you would invest  587.00  in Glen Burnie Bancorp on October 1, 2024 and sell it today you would lose (3.00) from holding Glen Burnie Bancorp or give up 0.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Glen Burnie Bancorp  vs.  First Keystone Corp

Glen Burnie Bancorp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Glen Burnie Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental drivers, Glen Burnie may actually be approaching a critical reversion point that can send shares even higher in January 2025.

First Keystone Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Keystone Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, First Keystone unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Glen Burnie and First Keystone

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

The idea behind Glen Burnie Bancorp and First Keystone 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.