Correlation Between Community West and Parke Bancorp
Can any of the company-specific risk be diversified away by investing in both Community West 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 Community West and Parke Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community West Bancshares and Parke Bancorp, you can compare the effects of market volatilities on Community West 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 Community West with a short position of Parke Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community West and Parke Bancorp.
Diversification Opportunities for Community West and Parke Bancorp
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Community and Parke is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Community West Bancshares and Parke Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parke Bancorp and Community West 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 Community West Bancshares 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 Community West i.e., Community West and Parke Bancorp go up and down completely randomly.
Pair Corralation between Community West and Parke Bancorp
Given the investment horizon of 90 days Community West Bancshares is expected to generate 1.06 times more return on investment than Parke Bancorp. However, Community West is 1.06 times more volatile than Parke Bancorp. It trades about 0.18 of its potential returns per unit of risk. Parke Bancorp is currently generating about 0.17 per unit of risk. If you would invest 1,769 in Community West Bancshares on May 30, 2025 and sell it today you would earn a total of 363.00 from holding Community West Bancshares or generate 20.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Community West Bancshares vs. Parke Bancorp
Performance |
| Timeline |
| Community West Bancshares |
| Parke Bancorp |
Community West and Parke Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community West and Parke Bancorp
The main advantage of trading using opposite Community West and Parke Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community West 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.| Community West vs. National Bank Holdings | Community West vs. Community Bank System | Community West vs. Home Bancorp | Community West vs. ST Bancorp |
| Parke Bancorp vs. Bankwell Financial Group | Parke Bancorp vs. Community West Bancshares | Parke Bancorp vs. Finward Bancorp | Parke Bancorp vs. Norwood 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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