Correlation Between Susquehanna Community and Muncy Bank

Can any of the company-specific risk be diversified away by investing in both Susquehanna Community and Muncy Bank 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 Muncy Bank 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 Muncy Bank Financial, you can compare the effects of market volatilities on Susquehanna Community and Muncy Bank 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 Muncy Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Susquehanna Community and Muncy Bank.

Diversification Opportunities for Susquehanna Community and Muncy Bank

-0.01

Correlation Coefficient

Susquehanna Community  Muncy Bank

Good diversification

The 3 months correlation between Susquehanna and Muncy is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Susquehanna Community Financia and Muncy Bank Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muncy Bank Financial 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 Muncy Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muncy Bank Financial has no effect on the direction of Susquehanna Community i.e., Susquehanna Community and Muncy Bank go up and down completely randomly.

Pair Corralation between Susquehanna Community and Muncy Bank

Given the investment horizon of 90 days Susquehanna Community Financial is expected to generate 2.76 times more return on investment than Muncy Bank. However, Susquehanna Community is 2.76 times more volatile than Muncy Bank Financial. It trades about 0.02 of its potential returns per unit of risk. Muncy Bank Financial is currently generating about -0.02 per unit of risk. If you would invest  1,550  in Susquehanna Community Financial on September 2, 2024 and sell it today you would lose (275.00) from holding Susquehanna Community Financial or give up 17.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	37.75%
Values	Daily Returns

Susquehanna Community Financia  vs.  Muncy Bank Financial

Susquehanna Community

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Susquehanna Community Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Susquehanna Community reported solid returns over the last few months and may actually be approaching a breakup point.

Muncy Bank Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Muncy Bank Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Muncy Bank is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Susquehanna Community and Muncy Bank

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

The idea behind Susquehanna Community Financial and Muncy Bank Financial 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.