Correlation Between Auburn National and Peapack Gladstone
Can any of the company-specific risk be diversified away by investing in both Auburn National and Peapack Gladstone 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 Peapack Gladstone 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 Peapack Gladstone Financial, you can compare the effects of market volatilities on Auburn National and Peapack Gladstone 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 Peapack Gladstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and Peapack Gladstone.
Diversification Opportunities for Auburn National and Peapack Gladstone
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auburn and Peapack is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and Peapack Gladstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peapack Gladstone 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 Peapack Gladstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peapack Gladstone has no effect on the direction of Auburn National i.e., Auburn National and Peapack Gladstone go up and down completely randomly.
Pair Corralation between Auburn National and Peapack Gladstone
Given the investment horizon of 90 days Auburn National is expected to generate 4.43 times less return on investment than Peapack Gladstone. But when comparing it to its historical volatility, Auburn National Bancorporation is 1.82 times less risky than Peapack Gladstone. It trades about 0.08 of its potential returns per unit of risk. Peapack Gladstone Financial is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,196 in Peapack Gladstone Financial on September 3, 2024 and sell it today you would earn a total of 438.00 from holding Peapack Gladstone Financial or generate 13.7% 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. Peapack Gladstone Financial
Performance |
| Timeline |
| Auburn National Banc |
| Peapack Gladstone |
Auburn National and Peapack Gladstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and Peapack Gladstone
The main advantage of trading using opposite Auburn National and Peapack Gladstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, Peapack Gladstone 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 Peapack Gladstone will offset losses from the drop in Peapack Gladstone's long position.| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California Bancorp |
| Peapack Gladstone vs. Sound Financial Bancorp | Peapack Gladstone vs. Finward Bancorp | Peapack Gladstone vs. Franklin Financial Services | Peapack Gladstone vs. Community West Bancshares |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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