Correlation Between First Sound and Oregon Pacific
Can any of the company-specific risk be diversified away by investing in both First Sound 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 First Sound and Oregon Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Sound Bank and Oregon Pacific Bancorp, you can compare the effects of market volatilities on First Sound 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 First Sound with a short position of Oregon Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Sound and Oregon Pacific.
Diversification Opportunities for First Sound and Oregon Pacific
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Oregon is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding First Sound 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 First Sound 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 Sound 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 First Sound i.e., First Sound and Oregon Pacific go up and down completely randomly.
Pair Corralation between First Sound and Oregon Pacific
Given the investment horizon of 90 days First Sound Bank is expected to generate 5.43 times more return on investment than Oregon Pacific. However, First Sound is 5.43 times more volatile than Oregon Pacific Bancorp. It trades about 0.08 of its potential returns per unit of risk. Oregon Pacific Bancorp is currently generating about 0.11 per unit of risk. If you would invest 390.00 in First Sound Bank on September 2, 2024 and sell it today you would earn a total of 280.00 from holding First Sound Bank or generate 71.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 53.23% |
| Values | Daily Returns |
First Sound Bank vs. Oregon Pacific Bancorp
Performance |
| Timeline |
| First Sound Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Oregon Pacific Bancorp |
First Sound and Oregon Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Sound and Oregon Pacific
The main advantage of trading using opposite First Sound and Oregon Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Sound 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.| First Sound vs. Rhinebeck Bancorp | First Sound vs. Magyar Bancorp | First Sound vs. Community West Bancshares | First Sound vs. First Financial Northwest |
| Oregon Pacific vs. 1ST SUMMIT BANCORP | Oregon Pacific vs. Apollo Bancorp | Oregon Pacific vs. The Farmers Bank | Oregon Pacific vs. Old National 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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