Correlation Between Old Point and First Keystone
Can any of the company-specific risk be diversified away by investing in both Old Point and First Keystone 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 First Keystone 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 First Keystone Corp, you can compare the effects of market volatilities on Old Point and First Keystone 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 First Keystone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Point and First Keystone.
Diversification Opportunities for Old Point and First Keystone
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and First is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Old Point Financial and First Keystone Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Keystone Corp 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 First Keystone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Keystone Corp has no effect on the direction of Old Point i.e., Old Point and First Keystone go up and down completely randomly.
Pair Corralation between Old Point and First Keystone
Given the investment horizon of 90 days Old Point Financial is expected to generate 1.08 times more return on investment than First Keystone. However, Old Point is 1.08 times more volatile than First Keystone Corp. It trades about 0.46 of its potential returns per unit of risk. First Keystone Corp is currently generating about 0.03 per unit of risk. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Point Financial vs. First Keystone Corp
Performance |
| Timeline |
| Old Point Financial |
| First Keystone Corp |
Old Point and First Keystone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Point and First Keystone
The main advantage of trading using opposite Old Point and First Keystone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Point position performs unexpectedly, First Keystone 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 First Keystone will offset losses from the drop in First Keystone'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 |
| First Keystone vs. Citizens Bancorp Investment | First Keystone vs. Greenville Federal Financial | First Keystone vs. Oak Ridge Financial | First Keystone 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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