Correlation Between ACNB and Codorus Valley
Can any of the company-specific risk be diversified away by investing in both ACNB and Codorus Valley 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 ACNB and Codorus Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACNB Corporation and Codorus Valley Bancorp, you can compare the effects of market volatilities on ACNB and Codorus Valley 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 ACNB with a short position of Codorus Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACNB and Codorus Valley.
Diversification Opportunities for ACNB and Codorus Valley
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ACNB and Codorus is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding ACNB Corp. and Codorus Valley Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codorus Valley Bancorp and ACNB 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 ACNB Corporation are associated (or correlated) with Codorus Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Codorus Valley Bancorp has no effect on the direction of ACNB i.e., ACNB and Codorus Valley go up and down completely randomly.
Pair Corralation between ACNB and Codorus Valley
Given the investment horizon of 90 days ACNB Corporation is expected to generate 1.6 times more return on investment than Codorus Valley. However, ACNB is 1.6 times more volatile than Codorus Valley Bancorp. It trades about 0.04 of its potential returns per unit of risk. Codorus Valley Bancorp is currently generating about 0.02 per unit of risk. If you would invest 3,522 in ACNB Corporation on August 24, 2024 and sell it today you would earn a total of 1,240 from holding ACNB Corporation or generate 35.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 79.6% |
| Values | Daily Returns |
ACNB Corp. vs. Codorus Valley Bancorp
Performance |
| Timeline |
| ACNB |
| Codorus Valley Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ACNB and Codorus Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACNB and Codorus Valley
The main advantage of trading using opposite ACNB and Codorus Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACNB position performs unexpectedly, Codorus Valley 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 Codorus Valley will offset losses from the drop in Codorus Valley's long position.The idea behind ACNB Corporation and Codorus Valley 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.| Codorus Valley vs. Home Federal Bancorp | Codorus Valley vs. First Financial Northwest | Codorus Valley vs. First Northwest Bancorp | Codorus Valley vs. First Capital |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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