Correlation Between Mainstreet Bank and SilverSun Technologies

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

Diversification Opportunities for Mainstreet Bank and SilverSun Technologies

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Mainstreet and SilverSun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mainstreet Bank and SilverSun Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverSun Technologies and Mainstreet 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 Mainstreet Bank are associated (or correlated) with SilverSun Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverSun Technologies has no effect on the direction of Mainstreet Bank i.e., Mainstreet Bank and SilverSun Technologies go up and down completely randomly.

Pair Corralation between Mainstreet Bank and SilverSun Technologies

If you would invest (100.00) in SilverSun Technologies on December 29, 2023 and sell it today you would earn a total of  100.00  from holding SilverSun Technologies or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Mainstreet Bank  vs.  SilverSun Technologies

 Performance 
       Timeline  
Mainstreet Bank 

Risk-Adjusted Performance

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Over the last 90 days Mainstreet Bank 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.
SilverSun Technologies 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days SilverSun Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SilverSun Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Mainstreet Bank and SilverSun Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mainstreet Bank and SilverSun Technologies

The main advantage of trading using opposite Mainstreet Bank and SilverSun Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstreet Bank position performs unexpectedly, SilverSun Technologies 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 SilverSun Technologies will offset losses from the drop in SilverSun Technologies' long position.
The idea behind Mainstreet Bank and SilverSun Technologies 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.
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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