Correlation Between Susquehanna Community and FNB

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

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

Diversification Opportunities for Susquehanna Community and FNB

0.69

Correlation Coefficient

Susquehanna Community  FNB

Poor diversification

The 3 months correlation between Susquehanna and FNB is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Susquehanna Community Financia and FNB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB Inc and Susquehanna Community 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 Susquehanna Community Financial are associated (or correlated) with FNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB Inc has no effect on the direction of Susquehanna Community i.e., Susquehanna Community and FNB go up and down completely randomly.

Pair Corralation between Susquehanna Community and FNB

Given the investment horizon of 90 days Susquehanna Community Financial is expected to under-perform the FNB. But the pink sheet apears to be less risky and, when comparing its historical volatility, Susquehanna Community Financial is 1.41 times less risky than FNB. The pink sheet trades about -0.2 of its potential returns per unit of risk. The FNB Inc is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  2,360  in FNB Inc on December 29, 2024 and sell it today you would lose (130.00) from holding FNB Inc or give up 5.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	91.8%
Values	Daily Returns

Susquehanna Community Financia  vs.  FNB Inc

Susquehanna Community

Risk-Adjusted Performance

Very Weak

Over the last 90 days Susquehanna Community Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

FNB Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days FNB Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, FNB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Susquehanna Community and FNB

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

The idea behind Susquehanna Community Financial and FNB Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..