Correlation Between Coeur DAlene and Parkway Acquisition

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

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

Diversification Opportunities for Coeur DAlene and Parkway Acquisition

-0.16

Correlation Coefficient

Coeur DAlene  Parkway Acquisition

Good diversification

The 3 months correlation between Coeur and Parkway is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Coeur dAlene Bancorp and Parkway Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parkway Acquisition Corp and Coeur DAlene 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 Coeur dAlene Bancorp are associated (or correlated) with Parkway Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parkway Acquisition Corp has no effect on the direction of Coeur DAlene i.e., Coeur DAlene and Parkway Acquisition go up and down completely randomly.

Pair Corralation between Coeur DAlene and Parkway Acquisition

If you would invest  1,500  in Coeur dAlene Bancorp on September 3, 2024 and sell it today you would earn a total of  175.00  from holding Coeur dAlene Bancorp or generate 11.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Coeur dAlene Bancorp  vs.  Parkway Acquisition Corp

Coeur dAlene Bancorp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coeur dAlene Bancorp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Coeur DAlene may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Parkway Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Parkway Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward-looking signals, Parkway Acquisition is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Coeur DAlene and Parkway Acquisition

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

The idea behind Coeur dAlene Bancorp and Parkway Acquisition 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.