Correlation Between Greenville Federal and 1ST SUMMIT

Can any of the company-specific risk be diversified away by investing in both Greenville Federal and 1ST SUMMIT 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 Greenville Federal and 1ST SUMMIT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Greenville Federal Financial and 1ST SUMMIT BANCORP, you can compare the effects of market volatilities on Greenville Federal and 1ST SUMMIT 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 Greenville Federal with a short position of 1ST SUMMIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenville Federal and 1ST SUMMIT.

Diversification Opportunities for Greenville Federal and 1ST SUMMIT

0.67

Correlation Coefficient

Greenville Federal  1ST SUMMIT

Poor diversification

The 3 months correlation between Greenville and 1ST is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Greenville Federal Financial and 1ST SUMMIT BANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1ST SUMMIT BANCORP and Greenville Federal 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 Greenville Federal Financial are associated (or correlated) with 1ST SUMMIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1ST SUMMIT BANCORP has no effect on the direction of Greenville Federal i.e., Greenville Federal and 1ST SUMMIT go up and down completely randomly.

Pair Corralation between Greenville Federal and 1ST SUMMIT

Given the investment horizon of 90 days Greenville Federal is expected to generate 1.04 times less return on investment than 1ST SUMMIT. In addition to that, Greenville Federal is 1.1 times more volatile than 1ST SUMMIT BANCORP. It trades about 0.08 of its total potential returns per unit of risk. 1ST SUMMIT BANCORP is currently generating about 0.09 per unit of volatility. If you would invest  2,610  in 1ST SUMMIT BANCORP on September 3, 2024 and sell it today you would earn a total of  165.00  from holding 1ST SUMMIT BANCORP or generate 6.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Greenville Federal Financial  vs.  1ST SUMMIT BANCORP

Greenville Federal

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Greenville Federal Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Greenville Federal is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

1ST SUMMIT BANCORP

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 1ST SUMMIT BANCORP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating primary indicators, 1ST SUMMIT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Greenville Federal and 1ST SUMMIT

The main advantage of trading using opposite Greenville Federal and 1ST SUMMIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenville Federal position performs unexpectedly, 1ST SUMMIT 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 1ST SUMMIT will offset losses from the drop in 1ST SUMMIT's long position.

The idea behind Greenville Federal Financial and 1ST SUMMIT BANCORP 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.