Correlation Between ConnectOne Bancorp and ESSEX
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By analyzing existing cross correlation between ConnectOne Bancorp and ESSEX PORTFOLIO L, you can compare the effects of market volatilities on ConnectOne Bancorp and ESSEX 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 ConnectOne Bancorp with a short position of ESSEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConnectOne Bancorp and ESSEX.
Diversification Opportunities for ConnectOne Bancorp and ESSEX
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ConnectOne and ESSEX is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ConnectOne Bancorp and ESSEX PORTFOLIO L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSEX PORTFOLIO L and ConnectOne 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 ConnectOne Bancorp are associated (or correlated) with ESSEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSEX PORTFOLIO L has no effect on the direction of ConnectOne Bancorp i.e., ConnectOne Bancorp and ESSEX go up and down completely randomly.
Pair Corralation between ConnectOne Bancorp and ESSEX
Assuming the 90 days horizon ConnectOne Bancorp is expected to generate 5.1 times more return on investment than ESSEX. However, ConnectOne Bancorp is 5.1 times more volatile than ESSEX PORTFOLIO L. It trades about 0.09 of its potential returns per unit of risk. ESSEX PORTFOLIO L is currently generating about -0.13 per unit of risk. If you would invest 2,109 in ConnectOne Bancorp on September 25, 2024 and sell it today you would earn a total of 117.00 from holding ConnectOne Bancorp or generate 5.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 87.3% |
Values | Daily Returns |
ConnectOne Bancorp vs. ESSEX PORTFOLIO L
Performance |
Timeline |
ConnectOne Bancorp |
ESSEX PORTFOLIO L |
ConnectOne Bancorp and ESSEX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ConnectOne Bancorp and ESSEX
The main advantage of trading using opposite ConnectOne Bancorp and ESSEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConnectOne Bancorp position performs unexpectedly, ESSEX 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 ESSEX will offset losses from the drop in ESSEX's long position.The idea behind ConnectOne Bancorp and ESSEX PORTFOLIO L 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.Check out your portfolio center.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.
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