Correlation Between Harford Bank and Bank of Utica
Can any of the company-specific risk be diversified away by investing in both Harford Bank and Bank of Utica 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 Harford Bank and Bank of Utica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harford Bank and Bank of Utica, you can compare the effects of market volatilities on Harford Bank and Bank of Utica 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 Harford Bank with a short position of Bank of Utica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harford Bank and Bank of Utica.
Diversification Opportunities for Harford Bank and Bank of Utica
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harford and Bank is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Harford Bank and Bank of Utica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Utica and Harford Bank 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 Harford Bank are associated (or correlated) with Bank of Utica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Utica has no effect on the direction of Harford Bank i.e., Harford Bank and Bank of Utica go up and down completely randomly.
Pair Corralation between Harford Bank and Bank of Utica
Given the investment horizon of 90 days Harford Bank is expected to generate 17.23 times less return on investment than Bank of Utica. But when comparing it to its historical volatility, Harford Bank is 3.25 times less risky than Bank of Utica. It trades about 0.04 of its potential returns per unit of risk. Bank of Utica is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 48,800 in Bank of Utica on September 25, 2024 and sell it today you would earn a total of 5,300 from holding Bank of Utica or generate 10.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Harford Bank vs. Bank of Utica
Performance |
Timeline |
Harford Bank |
Bank of Utica |
Harford Bank and Bank of Utica Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harford Bank and Bank of Utica
The main advantage of trading using opposite Harford Bank and Bank of Utica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harford Bank position performs unexpectedly, Bank of Utica 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 Bank of Utica will offset losses from the drop in Bank of Utica's long position.Harford Bank vs. Citizens Financial Corp | Harford Bank vs. Farmers Bancorp | Harford Bank vs. Alpine Banks of | Harford Bank vs. Taylor Calvin B |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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