Correlation Between Auburn National and Old Point
Can any of the company-specific risk be diversified away by investing in both Auburn National and Old Point 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 Auburn National and Old Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auburn National Bancorporation and Old Point Financial, you can compare the effects of market volatilities on Auburn National and Old Point 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 Auburn National with a short position of Old Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and Old Point.
Diversification Opportunities for Auburn National and Old Point
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auburn and Old is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and Old Point Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Point Financial and Auburn National 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 Auburn National Bancorporation are associated (or correlated) with Old Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Point Financial has no effect on the direction of Auburn National i.e., Auburn National and Old Point go up and down completely randomly.
Pair Corralation between Auburn National and Old Point
Given the investment horizon of 90 days Auburn National is expected to generate 1.13 times less return on investment than Old Point. In addition to that, Auburn National is 1.17 times more volatile than Old Point Financial. It trades about 0.18 of its total potential returns per unit of risk. Old Point Financial is currently generating about 0.23 per unit of volatility. If you would invest 2,041 in Old Point Financial on August 28, 2024 and sell it today you would earn a total of 141.00 from holding Old Point Financial or generate 6.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auburn National Bancorp. vs. Old Point Financial
Performance |
| Timeline |
| Auburn National Banc |
| Old Point Financial |
Auburn National and Old Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and Old Point
The main advantage of trading using opposite Auburn National and Old Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, Old Point 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 Old Point will offset losses from the drop in Old Point's long position.| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California Bancorp |
| Old Point vs. Fifth Third Bancorp | Old Point vs. Huntington Bancshares Incorporated | Old Point vs. Comerica | Old Point vs. MT Bank |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |