Correlation Between ACNB and Ameris Bancorp

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Can any of the company-specific risk be diversified away by investing in both ACNB and Ameris Bancorp 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 ACNB and Ameris Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACNB Corporation and Ameris Bancorp, you can compare the effects of market volatilities on ACNB and Ameris Bancorp 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 ACNB with a short position of Ameris Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACNB and Ameris Bancorp.

Diversification Opportunities for ACNB and Ameris Bancorp

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between ACNB and Ameris is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ACNB Corp. and Ameris Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameris Bancorp and ACNB 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 ACNB Corporation are associated (or correlated) with Ameris Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameris Bancorp has no effect on the direction of ACNB i.e., ACNB and Ameris Bancorp go up and down completely randomly.

Pair Corralation between ACNB and Ameris Bancorp

Given the investment horizon of 90 days ACNB is expected to generate 1.18 times less return on investment than Ameris Bancorp. In addition to that, ACNB is 1.12 times more volatile than Ameris Bancorp. It trades about 0.02 of its total potential returns per unit of risk. Ameris Bancorp is currently generating about 0.03 per unit of volatility. If you would invest  3,916  in Ameris Bancorp on December 29, 2023 and sell it today you would earn a total of  898.00  from holding Ameris Bancorp or generate 22.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

ACNB Corp.  vs.  Ameris Bancorp

 Performance 
       Timeline  
ACNB 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days ACNB Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Ameris Bancorp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Ameris Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ACNB and Ameris Bancorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ACNB and Ameris Bancorp

The main advantage of trading using opposite ACNB and Ameris Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACNB position performs unexpectedly, Ameris Bancorp 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 Ameris Bancorp will offset losses from the drop in Ameris Bancorp's long position.
The idea behind ACNB Corporation and Ameris 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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