Correlation Between Blue Ridge and LINKBANCORP
Can any of the company-specific risk be diversified away by investing in both Blue Ridge and LINKBANCORP 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 Blue Ridge and LINKBANCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Ridge Bankshares and LINKBANCORP, you can compare the effects of market volatilities on Blue Ridge and LINKBANCORP 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 Blue Ridge with a short position of LINKBANCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Ridge and LINKBANCORP.
Diversification Opportunities for Blue Ridge and LINKBANCORP
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blue and LINKBANCORP is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Blue Ridge Bankshares and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP and Blue Ridge 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 Blue Ridge Bankshares are associated (or correlated) with LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of Blue Ridge i.e., Blue Ridge and LINKBANCORP go up and down completely randomly.
Pair Corralation between Blue Ridge and LINKBANCORP
Given the investment horizon of 90 days Blue Ridge Bankshares is expected to generate 1.62 times more return on investment than LINKBANCORP. However, Blue Ridge is 1.62 times more volatile than LINKBANCORP. It trades about 0.2 of its potential returns per unit of risk. LINKBANCORP is currently generating about 0.23 per unit of risk. If you would invest 293.00 in Blue Ridge Bankshares on August 29, 2024 and sell it today you would earn a total of 57.00 from holding Blue Ridge Bankshares or generate 19.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Ridge Bankshares vs. LINKBANCORP
Performance |
| Timeline |
| Blue Ridge Bankshares |
| LINKBANCORP |
Blue Ridge and LINKBANCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Ridge and LINKBANCORP
The main advantage of trading using opposite Blue Ridge and LINKBANCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Ridge position performs unexpectedly, LINKBANCORP 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 LINKBANCORP will offset losses from the drop in LINKBANCORP's long position.| Blue Ridge vs. LINKBANCORP | Blue Ridge vs. Colony Bankcorp | Blue Ridge vs. Bankwell Financial Group | Blue Ridge vs. ECB Bancorp |
| LINKBANCORP vs. Home Federal Bancorp | LINKBANCORP vs. Lake Shore Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP vs. Magyar Bancorp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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