Correlation Between Sachem Capital and SCCB

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

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

Diversification Opportunities for Sachem Capital and SCCB

-0.56

Correlation Coefficient

Sachem Capital  SCCB

Excellent diversification

The 3 months correlation between Sachem and SCCB is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sachem Capital Corp and SCCB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCCB and Sachem Capital 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 Sachem Capital Corp are associated (or correlated) with SCCB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCCB has no effect on the direction of Sachem Capital i.e., Sachem Capital and SCCB go up and down completely randomly.

Pair Corralation between Sachem Capital and SCCB

If you would invest  2,396  in Sachem Capital Corp on September 21, 2024 and sell it today you would earn a total of  24.00  from holding Sachem Capital Corp or generate 1.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.94%
Values	Daily Returns

Sachem Capital Corp  vs.  SCCB

Sachem Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sachem Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Sachem Capital is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

SCCB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sachem Capital and SCCB

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

The idea behind Sachem Capital Corp and SCCB 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.