Correlation Between NBT Bancorp and DNB Financial
Can any of the company-specific risk be diversified away by investing in both NBT Bancorp and DNB 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 NBT Bancorp and DNB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBT Bancorp and DNB Financial, you can compare the effects of market volatilities on NBT Bancorp and DNB 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 NBT Bancorp with a short position of DNB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBT Bancorp and DNB Financial.
Diversification Opportunities for NBT Bancorp and DNB Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NBT and DNB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NBT Bancorp and DNB Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DNB Financial and NBT 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 NBT Bancorp are associated (or correlated) with DNB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DNB Financial has no effect on the direction of NBT Bancorp i.e., NBT Bancorp and DNB Financial go up and down completely randomly.
Pair Corralation between NBT Bancorp and DNB Financial
If you would invest 3,393 in NBT Bancorp on January 25, 2024 and sell it today you would earn a total of 209.00 from holding NBT Bancorp or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
NBT Bancorp vs. DNB Financial
Performance |
| Timeline |
| NBT Bancorp |
| DNB Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NBT Bancorp and DNB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBT Bancorp and DNB Financial
The main advantage of trading using opposite NBT Bancorp and DNB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBT Bancorp position performs unexpectedly, DNB 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 DNB Financial will offset losses from the drop in DNB Financial's long position.The idea behind NBT Bancorp and DNB Financial 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.| DNB Financial vs. Taiwan Semiconductor Manufacturing | DNB Financial vs. Transphorm Technology | DNB Financial vs. IPG Photonics | DNB Financial vs. United Microelectronics |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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