Correlation Between Kish Bancorp and Peak Bancorp

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

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

Diversification Opportunities for Kish Bancorp and Peak Bancorp

-0.66

Correlation Coefficient

Kish Bancorp  Peak Bancorp

Excellent diversification

The 3 months correlation between Kish and Peak is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kish Bancorp and Peak Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Bancorp and Kish Bancorp 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 Kish Bancorp are associated (or correlated) with Peak Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Bancorp has no effect on the direction of Kish Bancorp i.e., Kish Bancorp and Peak Bancorp go up and down completely randomly.

Pair Corralation between Kish Bancorp and Peak Bancorp

Given the investment horizon of 90 days Kish Bancorp is expected to generate 2.3 times more return on investment than Peak Bancorp. However, Kish Bancorp is 2.3 times more volatile than Peak Bancorp. It trades about 0.03 of its potential returns per unit of risk. Peak Bancorp is currently generating about -0.06 per unit of risk. If you would invest  2,866  in Kish Bancorp on September 4, 2024 and sell it today you would earn a total of  334.00  from holding Kish Bancorp or generate 11.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	39.38%
Values	Daily Returns

Kish Bancorp  vs.  Peak Bancorp

Kish Bancorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kish Bancorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Kish Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Peak Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kish Bancorp and Peak Bancorp

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

The idea behind Kish Bancorp and Peak 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.