Correlation Between Bank of Marin and Rhinebeck Bancorp
Can any of the company-specific risk be diversified away by investing in both Bank of Marin and Rhinebeck 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 Bank of Marin and Rhinebeck Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Marin and Rhinebeck Bancorp, you can compare the effects of market volatilities on Bank of Marin and Rhinebeck 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 Bank of Marin with a short position of Rhinebeck Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Marin and Rhinebeck Bancorp.
Diversification Opportunities for Bank of Marin and Rhinebeck Bancorp
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Rhinebeck is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Marin and Rhinebeck Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rhinebeck Bancorp and Bank of Marin 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 Bank of Marin are associated (or correlated) with Rhinebeck Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rhinebeck Bancorp has no effect on the direction of Bank of Marin i.e., Bank of Marin and Rhinebeck Bancorp go up and down completely randomly.
Pair Corralation between Bank of Marin and Rhinebeck Bancorp
Given the investment horizon of 90 days Bank of Marin is expected to under-perform the Rhinebeck Bancorp. In addition to that, Bank of Marin is 2.98 times more volatile than Rhinebeck Bancorp. It trades about -0.02 of its total potential returns per unit of risk. Rhinebeck Bancorp is currently generating about 0.14 per unit of volatility. If you would invest 996.00 in Rhinebeck Bancorp on November 28, 2024 and sell it today you would earn a total of 17.00 from holding Rhinebeck Bancorp or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Marin vs. Rhinebeck Bancorp
Performance |
| Timeline |
| Bank of Marin |
| Rhinebeck Bancorp |
Bank of Marin and Rhinebeck Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Marin and Rhinebeck Bancorp
The main advantage of trading using opposite Bank of Marin and Rhinebeck Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Marin position performs unexpectedly, Rhinebeck 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 Rhinebeck Bancorp will offset losses from the drop in Rhinebeck Bancorp's long position.| Bank of Marin vs. Community West Bancshares | Bank of Marin vs. Heritage Financial | Bank of Marin vs. First Financial Northwest | Bank of Marin vs. Sierra Bancorp |
| Rhinebeck Bancorp vs. Home Federal Bancorp | Rhinebeck Bancorp vs. Community West Bancshares | Rhinebeck Bancorp vs. Magyar Bancorp | Rhinebeck Bancorp vs. First Financial Northwest |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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