Correlation Between Old Point and Peoples Bancorp
Can any of the company-specific risk be diversified away by investing in both Old Point and Peoples Bancorp 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 Peoples Bancorp 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 Peoples Bancorp, you can compare the effects of market volatilities on Old Point and Peoples Bancorp 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 Peoples Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Point and Peoples Bancorp.
Diversification Opportunities for Old Point and Peoples Bancorp
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Old and Peoples is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Old Point Financial and Peoples Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Bancorp 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 Peoples Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Bancorp has no effect on the direction of Old Point i.e., Old Point and Peoples Bancorp go up and down completely randomly.
Pair Corralation between Old Point and Peoples Bancorp
Given the investment horizon of 90 days Old Point Financial is expected to under-perform the Peoples Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, Old Point Financial is 1.64 times less risky than Peoples Bancorp. The stock trades about -0.1 of its potential returns per unit of risk. The Peoples Bancorp is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 3,079 in Peoples Bancorp on November 9, 2024 and sell it today you would earn a total of 299.00 from holding Peoples Bancorp or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Point Financial vs. Peoples Bancorp
Performance |
| Timeline |
| Old Point Financial |
| Peoples Bancorp |
Old Point and Peoples Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Point and Peoples Bancorp
The main advantage of trading using opposite Old Point and Peoples Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Point position performs unexpectedly, Peoples Bancorp 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 Peoples Bancorp will offset losses from the drop in Peoples Bancorp'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 |
| Peoples Bancorp vs. Eagle Bancorp | Peoples Bancorp vs. Northrim BanCorp | Peoples Bancorp vs. United Bankshares | Peoples Bancorp vs. Pacific Premier 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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