Correlation Between NBT Bancorp and Emclaire Financial
Can any of the company-specific risk be diversified away by investing in both NBT Bancorp and Emclaire 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 Emclaire 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 Emclaire Financial Corp, you can compare the effects of market volatilities on NBT Bancorp and Emclaire 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 Emclaire Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBT Bancorp and Emclaire Financial.
Diversification Opportunities for NBT Bancorp and Emclaire Financial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NBT and Emclaire is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NBT Bancorp and Emclaire Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emclaire Financial Corp 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 Emclaire Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emclaire Financial Corp has no effect on the direction of NBT Bancorp i.e., NBT Bancorp and Emclaire Financial go up and down completely randomly.
Pair Corralation between NBT Bancorp and Emclaire Financial
If you would invest 3,250 in NBT Bancorp on January 25, 2024 and sell it today you would earn a total of 340.00 from holding NBT Bancorp or generate 10.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
NBT Bancorp vs. Emclaire Financial Corp
Performance |
Timeline |
NBT Bancorp |
Emclaire Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NBT Bancorp and Emclaire Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NBT Bancorp and Emclaire Financial
The main advantage of trading using opposite NBT Bancorp and Emclaire Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBT Bancorp position performs unexpectedly, Emclaire 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 Emclaire Financial will offset losses from the drop in Emclaire Financial's long position.NBT Bancorp vs. Oak Valley Bancorp | NBT Bancorp vs. Cullman Bancorp | NBT Bancorp vs. Home Federal Bancorp | NBT Bancorp vs. Finward Bancorp |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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