Correlation Between Artesian Resources and Parke Bancorp
Can any of the company-specific risk be diversified away by investing in both Artesian Resources and Parke 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 Artesian Resources and Parke Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artesian Resources and Parke Bancorp, you can compare the effects of market volatilities on Artesian Resources and Parke 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 Artesian Resources with a short position of Parke Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artesian Resources and Parke Bancorp.
Diversification Opportunities for Artesian Resources and Parke Bancorp
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Artesian and Parke is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Artesian Resources and Parke Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parke Bancorp and Artesian Resources 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 Artesian Resources are associated (or correlated) with Parke Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parke Bancorp has no effect on the direction of Artesian Resources i.e., Artesian Resources and Parke Bancorp go up and down completely randomly.
Pair Corralation between Artesian Resources and Parke Bancorp
Assuming the 90 days horizon Artesian Resources is expected to under-perform the Parke Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Artesian Resources is 1.22 times less risky than Parke Bancorp. The stock trades about -0.02 of its potential returns per unit of risk. The Parke Bancorp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,576 in Parke Bancorp on March 24, 2025 and sell it today you would earn a total of 369.00 from holding Parke Bancorp or generate 23.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artesian Resources vs. Parke Bancorp
Performance |
| Timeline |
| Artesian Resources |
| Parke Bancorp |
Artesian Resources and Parke Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artesian Resources and Parke Bancorp
The main advantage of trading using opposite Artesian Resources and Parke Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artesian Resources position performs unexpectedly, Parke 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 Parke Bancorp will offset losses from the drop in Parke Bancorp's long position.| Artesian Resources vs. California Water Service | Artesian Resources vs. The York Water | Artesian Resources vs. American States Water | Artesian Resources vs. Middlesex Water |
| Parke Bancorp vs. Sound Financial Bancorp | Parke Bancorp vs. Finward Bancorp | Parke Bancorp vs. Franklin Financial Services | Parke Bancorp vs. Community West Bancshares |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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