Correlation Between Cullman Bancorp and Old Point
Can any of the company-specific risk be diversified away by investing in both Cullman Bancorp and Old Point 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 Cullman Bancorp and Old Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullman Bancorp and Old Point Financial, you can compare the effects of market volatilities on Cullman Bancorp and Old Point 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 Cullman Bancorp with a short position of Old Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullman Bancorp and Old Point.
Diversification Opportunities for Cullman Bancorp and Old Point
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cullman and Old is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cullman Bancorp and Old Point Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Point Financial and Cullman Bancorp 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 Cullman Bancorp are associated (or correlated) with Old Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Point Financial has no effect on the direction of Cullman Bancorp i.e., Cullman Bancorp and Old Point go up and down completely randomly.
Pair Corralation between Cullman Bancorp and Old Point
Given the investment horizon of 90 days Cullman Bancorp is expected to under-perform the Old Point. But the stock apears to be less risky and, when comparing its historical volatility, Cullman Bancorp is 2.19 times less risky than Old Point. The stock trades about -0.03 of its potential returns per unit of risk. The Old Point Financial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,102 in Old Point Financial on August 27, 2024 and sell it today you would earn a total of 63.00 from holding Old Point Financial or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.49% |
| Values | Daily Returns |
Cullman Bancorp vs. Old Point Financial
Performance |
| Timeline |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Old Point Financial |
Cullman Bancorp and Old Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullman Bancorp and Old Point
The main advantage of trading using opposite Cullman Bancorp and Old Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullman Bancorp position performs unexpectedly, Old Point 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 Old Point will offset losses from the drop in Old Point's long position.| Cullman Bancorp vs. Home Federal Bancorp | Cullman Bancorp vs. Lake Shore Bancorp | Cullman Bancorp vs. Community West Bancshares | Cullman Bancorp vs. Magyar Bancorp |
| Old Point vs. First Community | Old Point vs. Oak Valley Bancorp | Old Point vs. Chemung Financial Corp | Old Point vs. Home 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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