Correlation Between Camden National and Oak Valley
Can any of the company-specific risk be diversified away by investing in both Camden National and Oak Valley 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 Camden National and Oak Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camden National and Oak Valley Bancorp, you can compare the effects of market volatilities on Camden National and Oak Valley 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 Camden National with a short position of Oak Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camden National and Oak Valley.
Diversification Opportunities for Camden National and Oak Valley
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Camden and Oak is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Camden National and Oak Valley Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Valley Bancorp and Camden 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 Camden National are associated (or correlated) with Oak Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Valley Bancorp has no effect on the direction of Camden National i.e., Camden National and Oak Valley go up and down completely randomly.
Pair Corralation between Camden National and Oak Valley
Considering the 90-day investment horizon Camden National is expected to generate 1.13 times less return on investment than Oak Valley. In addition to that, Camden National is 1.57 times more volatile than Oak Valley Bancorp. It trades about 0.16 of its total potential returns per unit of risk. Oak Valley Bancorp is currently generating about 0.28 per unit of volatility. If you would invest 2,716 in Oak Valley Bancorp on September 2, 2024 and sell it today you would earn a total of 400.00 from holding Oak Valley Bancorp or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camden National vs. Oak Valley Bancorp
Performance |
| Timeline |
| Camden National |
| Oak Valley Bancorp |
Camden National and Oak Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camden National and Oak Valley
The main advantage of trading using opposite Camden National and Oak Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camden National position performs unexpectedly, Oak Valley 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 Oak Valley will offset losses from the drop in Oak Valley's long position.| Camden National vs. First United | Camden National vs. First Community | Camden National vs. Greene County Bancorp | Camden National vs. Community West Bancshares |
| Oak Valley vs. Affinity Bancshares | Oak Valley vs. Auburn National Bancorporation | Oak Valley vs. BayCom Corp | Oak Valley vs. First Community |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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