Correlation Between Colony Bankcorp and LINKBANCORP

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Can any of the company-specific risk be diversified away by investing in both Colony Bankcorp 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 Colony Bankcorp and LINKBANCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colony Bankcorp and LINKBANCORP, you can compare the effects of market volatilities on Colony Bankcorp 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 Colony Bankcorp with a short position of LINKBANCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colony Bankcorp and LINKBANCORP.

Diversification Opportunities for Colony Bankcorp and LINKBANCORP

ColonyLINKBANCORPDiversified AwayColonyLINKBANCORPDiversified Away100%
0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between Colony and LINKBANCORP is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Colony Bankcorp and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP and Colony Bankcorp 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 Colony Bankcorp 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 Colony Bankcorp i.e., Colony Bankcorp and LINKBANCORP go up and down completely randomly.

Pair Corralation between Colony Bankcorp and LINKBANCORP

Given the investment horizon of 90 days Colony Bankcorp is expected to generate 1.36 times more return on investment than LINKBANCORP. However, Colony Bankcorp is 1.36 times more volatile than LINKBANCORP. It trades about 0.23 of its potential returns per unit of risk. LINKBANCORP is currently generating about -0.01 per unit of risk. If you would invest  1,591  in Colony Bankcorp on November 21, 2024 and sell it today you would earn a total of  162.00  from holding Colony Bankcorp or generate 10.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Colony Bankcorp  vs.  LINKBANCORP

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505
JavaScript chart by amCharts 3.21.15CBAN LNKB
       Timeline  
Colony Bankcorp 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Colony Bankcorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Colony Bankcorp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb14.51515.51616.51717.51818.5
LINKBANCORP 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in LINKBANCORP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, LINKBANCORP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb77.27.47.67.88

Colony Bankcorp and LINKBANCORP Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.63-4.22-2.81-1.390.01.362.794.225.657.08 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15CBAN LNKB
       Returns  

Pair Trading with Colony Bankcorp and LINKBANCORP

The main advantage of trading using opposite Colony Bankcorp and LINKBANCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colony Bankcorp 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.
The idea behind Colony Bankcorp and LINKBANCORP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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