Correlation Between Blue Ridge and ECB Bancorp

Can any of the company-specific risk be diversified away by investing in both Blue Ridge and ECB 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 Blue Ridge and ECB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blue Ridge Bankshares and ECB Bancorp, you can compare the effects of market volatilities on Blue Ridge and ECB 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 Blue Ridge with a short position of ECB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Ridge and ECB Bancorp.

Diversification Opportunities for Blue Ridge and ECB Bancorp

0.24

Correlation Coefficient

Blue Ridge  ECB Bancorp

Modest diversification

The 3 months correlation between Blue and ECB is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Blue Ridge Bankshares and ECB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECB Bancorp and Blue Ridge 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 Blue Ridge Bankshares are associated (or correlated) with ECB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECB Bancorp has no effect on the direction of Blue Ridge i.e., Blue Ridge and ECB Bancorp go up and down completely randomly.

Pair Corralation between Blue Ridge and ECB Bancorp

Given the investment horizon of 90 days Blue Ridge Bankshares is expected to generate 1.61 times more return on investment than ECB Bancorp. However, Blue Ridge is 1.61 times more volatile than ECB Bancorp. It trades about 0.14 of its potential returns per unit of risk. ECB Bancorp is currently generating about -0.01 per unit of risk. If you would invest  360.00  in Blue Ridge Bankshares on July 4, 2025 and sell it today you would earn a total of  67.00  from holding Blue Ridge Bankshares or generate 18.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Blue Ridge Bankshares  vs.  ECB Bancorp

Blue Ridge Bankshares

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Ridge Bankshares are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent fundamental drivers, Blue Ridge unveiled solid returns over the last few months and may actually be approaching a breakup point.

ECB Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days ECB Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, ECB Bancorp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Blue Ridge and ECB Bancorp

The main advantage of trading using opposite Blue Ridge and ECB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Ridge position performs unexpectedly, ECB 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 ECB Bancorp will offset losses from the drop in ECB Bancorp's long position.

The idea behind Blue Ridge Bankshares and ECB 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.