Correlation Between Sturgis Bancorp and Grand River

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

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

Diversification Opportunities for Sturgis Bancorp and Grand River

-0.03

Correlation Coefficient

Sturgis Bancorp  Grand River

Good diversification

The 3 months correlation between Sturgis and Grand is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sturgis Bancorp and Grand River Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand River Commerce and Sturgis 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 Sturgis Bancorp are associated (or correlated) with Grand River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand River Commerce has no effect on the direction of Sturgis Bancorp i.e., Sturgis Bancorp and Grand River go up and down completely randomly.

Pair Corralation between Sturgis Bancorp and Grand River

If you would invest  300.00  in Grand River Commerce on September 13, 2024 and sell it today you would lose (5.00) from holding Grand River Commerce or give up 1.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Sturgis Bancorp  vs.  Grand River Commerce

Sturgis Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sturgis Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Sturgis Bancorp is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Grand River Commerce

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Grand River Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Grand River is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Sturgis Bancorp and Grand River

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

The idea behind Sturgis Bancorp and Grand River Commerce 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.