Correlation Between LINKBANCORP and Hawthorn Bancshares
Can any of the company-specific risk be diversified away by investing in both LINKBANCORP and Hawthorn Bancshares 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 LINKBANCORP and Hawthorn Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LINKBANCORP and Hawthorn Bancshares, you can compare the effects of market volatilities on LINKBANCORP and Hawthorn Bancshares 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 LINKBANCORP with a short position of Hawthorn Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of LINKBANCORP and Hawthorn Bancshares.
Diversification Opportunities for LINKBANCORP and Hawthorn Bancshares
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LINKBANCORP and Hawthorn is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding LINKBANCORP and Hawthorn Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawthorn Bancshares and LINKBANCORP 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 LINKBANCORP are associated (or correlated) with Hawthorn Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawthorn Bancshares has no effect on the direction of LINKBANCORP i.e., LINKBANCORP and Hawthorn Bancshares go up and down completely randomly.
Pair Corralation between LINKBANCORP and Hawthorn Bancshares
Given the investment horizon of 90 days LINKBANCORP is expected to generate 2.75 times less return on investment than Hawthorn Bancshares. In addition to that, LINKBANCORP is 1.01 times more volatile than Hawthorn Bancshares. It trades about 0.03 of its total potential returns per unit of risk. Hawthorn Bancshares is currently generating about 0.1 per unit of volatility. If you would invest 2,067 in Hawthorn Bancshares on September 4, 2024 and sell it today you would earn a total of 1,173 from holding Hawthorn Bancshares or generate 56.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
LINKBANCORP vs. Hawthorn Bancshares
Performance |
| Timeline |
| LINKBANCORP |
| Hawthorn Bancshares |
LINKBANCORP and Hawthorn Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LINKBANCORP and Hawthorn Bancshares
The main advantage of trading using opposite LINKBANCORP and Hawthorn Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LINKBANCORP position performs unexpectedly, Hawthorn Bancshares 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 Hawthorn Bancshares will offset losses from the drop in Hawthorn Bancshares' long position.| LINKBANCORP vs. International Bancshares | LINKBANCORP vs. Finward Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP vs. Aquagold International |
| Hawthorn Bancshares vs. Magyar Bancorp | Hawthorn Bancshares vs. Home Federal Bancorp | Hawthorn Bancshares vs. Community West Bancshares | Hawthorn Bancshares vs. LINKBANCORP |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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