Correlation Between Old Point and Auburn National
Can any of the company-specific risk be diversified away by investing in both Old Point and Auburn National 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 Old Point and Auburn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Point Financial and Auburn National Bancorporation, you can compare the effects of market volatilities on Old Point and Auburn National 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 Old Point with a short position of Auburn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Point and Auburn National.
Diversification Opportunities for Old Point and Auburn National
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Auburn is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Old Point Financial and Auburn National Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auburn National Banc and Old Point 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 Old Point Financial are associated (or correlated) with Auburn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auburn National Banc has no effect on the direction of Old Point i.e., Old Point and Auburn National go up and down completely randomly.
Pair Corralation between Old Point and Auburn National
Given the investment horizon of 90 days Old Point is expected to generate 2.07 times less return on investment than Auburn National. But when comparing it to its historical volatility, Old Point Financial is 1.29 times less risky than Auburn National. It trades about 0.26 of its potential returns per unit of risk. Auburn National Bancorporation is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 2,035 in Auburn National Bancorporation on August 24, 2024 and sell it today you would earn a total of 317.00 from holding Auburn National Bancorporation or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Point Financial vs. Auburn National Bancorp.
Performance |
| Timeline |
| Old Point Financial |
| Auburn National Banc |
Old Point and Auburn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Point and Auburn National
The main advantage of trading using opposite Old Point and Auburn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Point position performs unexpectedly, Auburn National 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 Auburn National will offset losses from the drop in Auburn National's long position.| Old Point vs. First Community | Old Point vs. Oak Valley Bancorp | Old Point vs. Chemung Financial Corp | Old Point vs. Home Bancorp |
| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California 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 Stocks Directory module to find actively traded stocks across global markets.
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