Correlation Between Farmers Bank and Oregon Pacific
Can any of the company-specific risk be diversified away by investing in both Farmers Bank and Oregon Pacific 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 Farmers Bank and Oregon Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Farmers Bank and Oregon Pacific Bancorp, you can compare the effects of market volatilities on Farmers Bank and Oregon Pacific 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 Farmers Bank with a short position of Oregon Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Bank and Oregon Pacific.
Diversification Opportunities for Farmers Bank and Oregon Pacific
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Farmers and Oregon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Farmers Bank and Oregon Pacific Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oregon Pacific Bancorp and Farmers Bank 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 The Farmers Bank are associated (or correlated) with Oregon Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oregon Pacific Bancorp has no effect on the direction of Farmers Bank i.e., Farmers Bank and Oregon Pacific go up and down completely randomly.
Pair Corralation between Farmers Bank and Oregon Pacific
Given the investment horizon of 90 days Farmers Bank is expected to generate 2.26 times less return on investment than Oregon Pacific. But when comparing it to its historical volatility, The Farmers Bank is 1.34 times less risky than Oregon Pacific. It trades about 0.08 of its potential returns per unit of risk. Oregon Pacific Bancorp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 780.00 in Oregon Pacific Bancorp on November 27, 2024 and sell it today you would earn a total of 53.00 from holding Oregon Pacific Bancorp or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Farmers Bank vs. Oregon Pacific Bancorp
Performance |
| Timeline |
| Farmers Bank |
| Oregon Pacific Bancorp |
Farmers Bank and Oregon Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Bank and Oregon Pacific
The main advantage of trading using opposite Farmers Bank and Oregon Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Bank position performs unexpectedly, Oregon Pacific 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 Oregon Pacific will offset losses from the drop in Oregon Pacific's long position.| Farmers Bank vs. CIB Marine Bancshares | Farmers Bank vs. F M Bank | Farmers Bank vs. ENB Financial Corp | Farmers Bank vs. First Bankers Trustshares |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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