Correlation Between First Mid and Peapack Gladstone
Can any of the company-specific risk be diversified away by investing in both First Mid and Peapack Gladstone 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 First Mid and Peapack Gladstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Mid Illinois and Peapack Gladstone Financial, you can compare the effects of market volatilities on First Mid and Peapack Gladstone 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 First Mid with a short position of Peapack Gladstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Mid and Peapack Gladstone.
Diversification Opportunities for First Mid and Peapack Gladstone
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Peapack is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding First Mid Illinois and Peapack Gladstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peapack Gladstone and First Mid 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 First Mid Illinois are associated (or correlated) with Peapack Gladstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peapack Gladstone has no effect on the direction of First Mid i.e., First Mid and Peapack Gladstone go up and down completely randomly.
Pair Corralation between First Mid and Peapack Gladstone
Given the investment horizon of 90 days First Mid Illinois is expected to generate 0.98 times more return on investment than Peapack Gladstone. However, First Mid Illinois is 1.02 times less risky than Peapack Gladstone. It trades about 0.16 of its potential returns per unit of risk. Peapack Gladstone Financial is currently generating about 0.15 per unit of risk. If you would invest 3,853 in First Mid Illinois on August 27, 2024 and sell it today you would earn a total of 419.00 from holding First Mid Illinois or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Mid Illinois vs. Peapack Gladstone Financial
Performance |
| Timeline |
| First Mid Illinois |
| Peapack Gladstone |
First Mid and Peapack Gladstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Mid and Peapack Gladstone
The main advantage of trading using opposite First Mid and Peapack Gladstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Mid position performs unexpectedly, Peapack Gladstone 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 Peapack Gladstone will offset losses from the drop in Peapack Gladstone's long position.| First Mid vs. Finward Bancorp | First Mid vs. Great Southern Bancorp | First Mid vs. Franklin Financial Services | First Mid vs. Community West Bancshares |
| Peapack Gladstone vs. Fifth Third Bancorp | Peapack Gladstone vs. Zions Bancorporation | Peapack Gladstone vs. Huntington Bancshares Incorporated | Peapack Gladstone vs. Comerica |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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