Correlation Between Parke Bancorp and TC Bancshares

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

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

Diversification Opportunities for Parke Bancorp and TC Bancshares

0.43

Correlation Coefficient

Parke Bancorp  TC Bancshares

Very weak diversification

The 3 months correlation between Parke and TCBC is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Parke Bancorp and TC Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Bancshares and Parke Bancorp 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 Parke Bancorp are associated (or correlated) with TC Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Bancshares has no effect on the direction of Parke Bancorp i.e., Parke Bancorp and TC Bancshares go up and down completely randomly.

Pair Corralation between Parke Bancorp and TC Bancshares

Given the investment horizon of 90 days Parke Bancorp is expected to generate 1.54 times more return on investment than TC Bancshares. However, Parke Bancorp is 1.54 times more volatile than TC Bancshares. It trades about 0.08 of its potential returns per unit of risk. TC Bancshares is currently generating about 0.02 per unit of risk. If you would invest  2,019  in Parke Bancorp on August 3, 2025 and sell it today you would earn a total of  142.00  from holding Parke Bancorp or generate 7.03% return on investment over 90 days.

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

Parke Bancorp  vs.  TC Bancshares

Parke Bancorp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Parke Bancorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental drivers, Parke Bancorp may actually be approaching a critical reversion point that can send shares even higher in December 2025.

TC Bancshares

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in TC Bancshares are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, TC Bancshares is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Parke Bancorp and TC Bancshares

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

The idea behind Parke Bancorp and TC Bancshares 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.