Correlation Between Tectonic Financial and AmeriServ Financial
Can any of the company-specific risk be diversified away by investing in both Tectonic Financial and AmeriServ Financial 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 Tectonic Financial and AmeriServ Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tectonic Financial PR and AmeriServ Financial, you can compare the effects of market volatilities on Tectonic Financial and AmeriServ Financial 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 Tectonic Financial with a short position of AmeriServ Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and AmeriServ Financial.
Diversification Opportunities for Tectonic Financial and AmeriServ Financial
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tectonic and AmeriServ is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR and AmeriServ Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmeriServ Financial and Tectonic Financial 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 Tectonic Financial PR are associated (or correlated) with AmeriServ Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmeriServ Financial has no effect on the direction of Tectonic Financial i.e., Tectonic Financial and AmeriServ Financial go up and down completely randomly.
Pair Corralation between Tectonic Financial and AmeriServ Financial
Assuming the 90 days horizon Tectonic Financial PR is expected to generate 0.52 times more return on investment than AmeriServ Financial. However, Tectonic Financial PR is 1.93 times less risky than AmeriServ Financial. It trades about 0.03 of its potential returns per unit of risk. AmeriServ Financial is currently generating about -0.01 per unit of risk. If you would invest 877.00 in Tectonic Financial PR on February 23, 2024 and sell it today you would earn a total of 145.00 from holding Tectonic Financial PR or generate 16.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Tectonic Financial PR vs. AmeriServ Financial
Performance |
Timeline |
Tectonic Financial |
AmeriServ Financial |
Tectonic Financial and AmeriServ Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tectonic Financial and AmeriServ Financial
The main advantage of trading using opposite Tectonic Financial and AmeriServ Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic Financial position performs unexpectedly, AmeriServ Financial 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 AmeriServ Financial will offset losses from the drop in AmeriServ Financial's long position.Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Bridgewater Bancshares Depositary |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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