Correlation Between Berkshire Hills and Oakworth Capital
Can any of the company-specific risk be diversified away by investing in both Berkshire Hills and Oakworth Capital 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 Berkshire Hills and Oakworth Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hills Bancorp and Oakworth Capital, you can compare the effects of market volatilities on Berkshire Hills and Oakworth Capital 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 Berkshire Hills with a short position of Oakworth Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hills and Oakworth Capital.
Diversification Opportunities for Berkshire Hills and Oakworth Capital
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Berkshire and Oakworth is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hills Bancorp and Oakworth Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakworth Capital and Berkshire Hills 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 Berkshire Hills Bancorp are associated (or correlated) with Oakworth Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakworth Capital has no effect on the direction of Berkshire Hills i.e., Berkshire Hills and Oakworth Capital go up and down completely randomly.
Pair Corralation between Berkshire Hills and Oakworth Capital
Given the investment horizon of 90 days Berkshire Hills Bancorp is expected to under-perform the Oakworth Capital. In addition to that, Berkshire Hills is 4.5 times more volatile than Oakworth Capital. It trades about -0.18 of its total potential returns per unit of risk. Oakworth Capital is currently generating about -0.52 per unit of volatility. If you would invest 3,250 in Oakworth Capital on January 16, 2025 and sell it today you would lose (210.00) from holding Oakworth Capital or give up 6.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hills Bancorp vs. Oakworth Capital
Performance |
| Timeline |
| Berkshire Hills Bancorp |
| Oakworth Capital |
Berkshire Hills and Oakworth Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hills and Oakworth Capital
The main advantage of trading using opposite Berkshire Hills and Oakworth Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hills position performs unexpectedly, Oakworth Capital 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 Oakworth Capital will offset losses from the drop in Oakworth Capital's long position.| Berkshire Hills vs. Finward Bancorp | Berkshire Hills vs. Community West Bancshares | Berkshire Hills vs. First Community | Berkshire Hills vs. First Capital |
| Oakworth Capital vs. Procter Gamble | Oakworth Capital vs. Lindblad Expeditions Holdings | Oakworth Capital vs. Centessa Pharmaceuticals PLC | Oakworth Capital vs. Coty Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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