Correlation Between BOK Financial and Rhinebeck Bancorp
Can any of the company-specific risk be diversified away by investing in both BOK Financial 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 BOK Financial and Rhinebeck Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOK Financial and Rhinebeck Bancorp, you can compare the effects of market volatilities on BOK Financial 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 BOK Financial with a short position of Rhinebeck Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOK Financial and Rhinebeck Bancorp.
Diversification Opportunities for BOK Financial and Rhinebeck Bancorp
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BOK and Rhinebeck is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BOK Financial and Rhinebeck Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rhinebeck Bancorp and BOK Financial 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 BOK Financial 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 BOK Financial i.e., BOK Financial and Rhinebeck Bancorp go up and down completely randomly.
Pair Corralation between BOK Financial and Rhinebeck Bancorp
Given the investment horizon of 90 days BOK Financial is expected to generate 3.3 times more return on investment than Rhinebeck Bancorp. However, BOK Financial is 3.3 times more volatile than Rhinebeck Bancorp. It trades about 0.17 of its potential returns per unit of risk. Rhinebeck Bancorp is currently generating about 0.48 per unit of risk. If you would invest 10,780 in BOK Financial on August 29, 2024 and sell it today you would earn a total of 1,145 from holding BOK Financial or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOK Financial vs. Rhinebeck Bancorp
Performance |
| Timeline |
| BOK Financial |
| Rhinebeck Bancorp |
BOK Financial and Rhinebeck Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOK Financial and Rhinebeck Bancorp
The main advantage of trading using opposite BOK Financial and Rhinebeck Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOK Financial 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.| BOK Financial vs. First Financial Bankshares | BOK Financial vs. Auburn National Bancorporation | BOK Financial vs. Great Southern Bancorp | BOK Financial vs. First Guaranty Bancshares |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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