Correlation Between Astar and Oregon Bancorp
Can any of the company-specific risk be diversified away by investing in both Astar and Oregon 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 Astar and Oregon Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Oregon Bancorp, you can compare the effects of market volatilities on Astar and Oregon 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 Astar with a short position of Oregon Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Oregon Bancorp.
Diversification Opportunities for Astar and Oregon Bancorp
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astar and Oregon is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Oregon Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oregon Bancorp and Astar 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 Astar are associated (or correlated) with Oregon Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oregon Bancorp has no effect on the direction of Astar i.e., Astar and Oregon Bancorp go up and down completely randomly.
Pair Corralation between Astar and Oregon Bancorp
Assuming the 90 days trading horizon Astar is expected to under-perform the Oregon Bancorp. In addition to that, Astar is 3.58 times more volatile than Oregon Bancorp. It trades about -0.18 of its total potential returns per unit of risk. Oregon Bancorp is currently generating about -0.23 per unit of volatility. If you would invest 2,380 in Oregon Bancorp on October 12, 2024 and sell it today you would lose (150.00) from holding Oregon Bancorp or give up 6.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Astar vs. Oregon Bancorp
Performance |
| Timeline |
| Astar |
| Oregon Bancorp |
Astar and Oregon Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Oregon Bancorp
The main advantage of trading using opposite Astar and Oregon Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Oregon 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 Oregon Bancorp will offset losses from the drop in Oregon Bancorp's long position.The idea behind Astar and Oregon 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.| Oregon Bancorp vs. National Capital Bank | Oregon Bancorp vs. Community Heritage Financial | Oregon Bancorp vs. Citizens Financial Corp | Oregon Bancorp vs. First Community Financial |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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