Correlation Between Oconee Federal and Oak Ridge
Can any of the company-specific risk be diversified away by investing in both Oconee Federal and Oak Ridge 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 Oconee Federal and Oak Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oconee Federal Financial and Oak Ridge Financial, you can compare the effects of market volatilities on Oconee Federal and Oak Ridge 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 Oconee Federal with a short position of Oak Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oconee Federal and Oak Ridge.
Diversification Opportunities for Oconee Federal and Oak Ridge
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oconee and Oak is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Oconee Federal Financial and Oak Ridge Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Ridge Financial and Oconee 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 Oconee Federal Financial are associated (or correlated) with Oak Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Ridge Financial has no effect on the direction of Oconee Federal i.e., Oconee Federal and Oak Ridge go up and down completely randomly.
Pair Corralation between Oconee Federal and Oak Ridge
Given the investment horizon of 90 days Oconee Federal Financial is expected to under-perform the Oak Ridge. In addition to that, Oconee Federal is 1.2 times more volatile than Oak Ridge Financial. It trades about -0.1 of its total potential returns per unit of risk. Oak Ridge Financial is currently generating about 0.03 per unit of volatility. If you would invest 1,786 in Oak Ridge Financial on September 3, 2024 and sell it today you would earn a total of 289.00 from holding Oak Ridge Financial or generate 16.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 37.68% |
| Values | Daily Returns |
Oconee Federal Financial vs. Oak Ridge Financial
Performance |
| Timeline |
| Oconee Federal Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Oak Ridge Financial |
Oconee Federal and Oak Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oconee Federal and Oak Ridge
The main advantage of trading using opposite Oconee Federal and Oak Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oconee Federal position performs unexpectedly, Oak Ridge 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 Oak Ridge will offset losses from the drop in Oak Ridge's long position.| Oconee Federal vs. Home Federal Bancorp | Oconee Federal vs. Community West Bancshares | Oconee Federal vs. Magyar Bancorp |
| Oak Ridge vs. Citizens Bancorp Investment | Oak Ridge vs. First Keystone Corp | Oak Ridge vs. Greenville Federal Financial | Oak Ridge vs. Main Street Financial |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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