Correlation Between Greenville Federal and Old Point
Can any of the company-specific risk be diversified away by investing in both Greenville Federal 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 Greenville Federal and Old Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenville Federal Financial and Old Point Financial, you can compare the effects of market volatilities on Greenville Federal 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 Greenville Federal with a short position of Old Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenville Federal and Old Point.
Diversification Opportunities for Greenville Federal and Old Point
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Greenville and Old is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Greenville Federal Financial 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 Greenville Federal 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 Greenville Federal Financial 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 Greenville Federal i.e., Greenville Federal and Old Point go up and down completely randomly.
Pair Corralation between Greenville Federal and Old Point
Given the investment horizon of 90 days Greenville Federal is expected to generate 35.87 times less return on investment than Old Point. But when comparing it to its historical volatility, Greenville Federal Financial is 16.43 times less risky than Old Point. It trades about 0.21 of its potential returns per unit of risk. Old Point Financial is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 2,441 in Old Point Financial on December 1, 2024 and sell it today you would earn a total of 628.00 from holding Old Point Financial or generate 25.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Greenville Federal Financial vs. Old Point Financial
Performance |
| Timeline |
| Greenville Federal |
| Old Point Financial |
Greenville Federal and Old Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenville Federal and Old Point
The main advantage of trading using opposite Greenville Federal and Old Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenville Federal 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.| Greenville Federal vs. First Bankers Trustshares | Greenville Federal vs. First Ottawa Bancshares | Greenville Federal vs. Coastal Carolina Bancshares | Greenville Federal vs. Citizens Bancorp Investment |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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