Correlation Between Luther Burbank and Penns Woods
Can any of the company-specific risk be diversified away by investing in both Luther Burbank and Penns Woods 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 Luther Burbank and Penns Woods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luther Burbank and Penns Woods Bancorp, you can compare the effects of market volatilities on Luther Burbank and Penns Woods 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 Luther Burbank with a short position of Penns Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luther Burbank and Penns Woods.
Diversification Opportunities for Luther Burbank and Penns Woods
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luther and Penns is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Luther Burbank and Penns Woods Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penns Woods Bancorp and Luther Burbank 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 Luther Burbank are associated (or correlated) with Penns Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penns Woods Bancorp has no effect on the direction of Luther Burbank i.e., Luther Burbank and Penns Woods go up and down completely randomly.
Pair Corralation between Luther Burbank and Penns Woods
If you would invest 2,560 in Penns Woods Bancorp on August 26, 2024 and sell it today you would earn a total of 481.00 from holding Penns Woods Bancorp or generate 18.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Luther Burbank vs. Penns Woods Bancorp
Performance |
| Timeline |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Penns Woods Bancorp |
Luther Burbank and Penns Woods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luther Burbank and Penns Woods
The main advantage of trading using opposite Luther Burbank and Penns Woods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luther Burbank position performs unexpectedly, Penns Woods 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 Penns Woods will offset losses from the drop in Penns Woods' long position.| Luther Burbank vs. First Community | Luther Burbank vs. Community West Bancshares | Luther Burbank vs. First Financial Northwest | Luther Burbank vs. First Northwest Bancorp |
| Penns Woods vs. 1st Source | Penns Woods vs. Great Southern Bancorp | Penns Woods vs. Waterstone Financial | Penns Woods vs. First Community |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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