Correlation Between Amalgamated Bank and AmeriServ Financial
Can any of the company-specific risk be diversified away by investing in both Amalgamated Bank 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 Amalgamated Bank and AmeriServ Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amalgamated Bank and AmeriServ Financial, you can compare the effects of market volatilities on Amalgamated Bank 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 Amalgamated Bank with a short position of AmeriServ Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amalgamated Bank and AmeriServ Financial.
Diversification Opportunities for Amalgamated Bank and AmeriServ Financial
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amalgamated and AmeriServ is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Amalgamated Bank and AmeriServ Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmeriServ Financial and Amalgamated Bank 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 Amalgamated Bank 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 Amalgamated Bank i.e., Amalgamated Bank and AmeriServ Financial go up and down completely randomly.
Pair Corralation between Amalgamated Bank and AmeriServ Financial
Given the investment horizon of 90 days Amalgamated Bank is expected to generate 0.47 times more return on investment than AmeriServ Financial. However, Amalgamated Bank is 2.11 times less risky than AmeriServ Financial. It trades about 0.04 of its potential returns per unit of risk. AmeriServ Financial is currently generating about 0.01 per unit of risk. If you would invest 2,466 in Amalgamated Bank on February 11, 2024 and sell it today you would earn a total of 90.00 from holding Amalgamated Bank or generate 3.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Amalgamated Bank vs. AmeriServ Financial
Performance |
Timeline |
Amalgamated Bank |
AmeriServ Financial |
Amalgamated Bank and AmeriServ Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amalgamated Bank and AmeriServ Financial
The main advantage of trading using opposite Amalgamated Bank and AmeriServ Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amalgamated Bank 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.Amalgamated Bank vs. Home Bancorp | Amalgamated Bank vs. Community West Bancshares | Amalgamated Bank vs. First Community | Amalgamated Bank vs. Great Southern Bancorp |
AmeriServ Financial vs. 1ST SUMMIT BANCORP | AmeriServ Financial vs. Potomac Bancshares | AmeriServ Financial vs. Apollo Bancorp | AmeriServ Financial vs. Century Financial Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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