Correlation Between Apollo Bancorp and Katahdin Bankshares

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

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

Diversification Opportunities for Apollo Bancorp and Katahdin Bankshares

-0.91

Correlation Coefficient

Apollo Bancorp  Katahdin Bankshares

Pay attention - limited upside

The 3 months correlation between Apollo and Katahdin is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Bancorp and Katahdin Bankshares Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katahdin Bankshares Corp and Apollo 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 Apollo Bancorp are associated (or correlated) with Katahdin Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katahdin Bankshares Corp has no effect on the direction of Apollo Bancorp i.e., Apollo Bancorp and Katahdin Bankshares go up and down completely randomly.

Pair Corralation between Apollo Bancorp and Katahdin Bankshares

Given the investment horizon of 90 days Apollo Bancorp is expected to under-perform the Katahdin Bankshares. In addition to that, Apollo Bancorp is 1.1 times more volatile than Katahdin Bankshares Corp. It trades about -0.14 of its total potential returns per unit of risk. Katahdin Bankshares Corp is currently generating about 0.19 per unit of volatility. If you would invest  2,215  in Katahdin Bankshares Corp on September 12, 2024 and sell it today you would earn a total of  285.00  from holding Katahdin Bankshares Corp or generate 12.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Apollo Bancorp  vs.  Katahdin Bankshares Corp

Apollo Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Katahdin Bankshares Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Katahdin Bankshares Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical indicators, Katahdin Bankshares may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Apollo Bancorp and Katahdin Bankshares

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

The idea behind Apollo Bancorp and Katahdin Bankshares Corp 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 CEOs Directory module to screen CEOs from public companies around the world.