Correlation Between Greenville Federal and Glen Burnie

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

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

Diversification Opportunities for Greenville Federal and Glen Burnie

-0.42

Correlation Coefficient

Greenville Federal  Glen Burnie

Very good diversification

The 3 months correlation between Greenville and Glen is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Greenville Federal Financial and Glen Burnie Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glen Burnie Bancorp and Greenville Federal 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 Greenville Federal Financial are associated (or correlated) with Glen Burnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glen Burnie Bancorp has no effect on the direction of Greenville Federal i.e., Greenville Federal and Glen Burnie go up and down completely randomly.

Pair Corralation between Greenville Federal and Glen Burnie

Given the investment horizon of 90 days Greenville Federal Financial is expected to generate 0.2 times more return on investment than Glen Burnie. However, Greenville Federal Financial is 4.96 times less risky than Glen Burnie. It trades about 0.02 of its potential returns per unit of risk. Glen Burnie Bancorp is currently generating about -0.04 per unit of risk. If you would invest  715.00  in Greenville Federal Financial on December 29, 2024 and sell it today you would earn a total of  5.00  from holding Greenville Federal Financial or generate 0.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Greenville Federal Financial  vs.  Glen Burnie Bancorp

Greenville Federal

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greenville Federal Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Greenville Federal is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Glen Burnie Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glen Burnie Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Glen Burnie is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Greenville Federal and Glen Burnie

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

The idea behind Greenville Federal Financial and Glen Burnie 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.