Correlation Between Old Point and Southern Missouri
Can any of the company-specific risk be diversified away by investing in both Old Point and Southern Missouri 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 Southern Missouri 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 Southern Missouri Bancorp, you can compare the effects of market volatilities on Old Point and Southern Missouri 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 Southern Missouri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Point and Southern Missouri.
Diversification Opportunities for Old Point and Southern Missouri
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Old and Southern is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Old Point Financial and Southern Missouri Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Missouri 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 Southern Missouri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Missouri Bancorp has no effect on the direction of Old Point i.e., Old Point and Southern Missouri go up and down completely randomly.
Pair Corralation between Old Point and Southern Missouri
Given the investment horizon of 90 days Old Point Financial is expected to generate 1.77 times more return on investment than Southern Missouri. However, Old Point is 1.77 times more volatile than Southern Missouri Bancorp. It trades about 0.31 of its potential returns per unit of risk. Southern Missouri Bancorp is currently generating about 0.23 per unit of risk. If you would invest 2,510 in Old Point Financial on November 18, 2024 and sell it today you would earn a total of 440.00 from holding Old Point Financial or generate 17.53% 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. Southern Missouri Bancorp
Performance |
| Timeline |
| Old Point Financial |
| Southern Missouri Bancorp |
Old Point and Southern Missouri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Point and Southern Missouri
The main advantage of trading using opposite Old Point and Southern Missouri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Point position performs unexpectedly, Southern Missouri 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 Southern Missouri will offset losses from the drop in Southern Missouri'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 |
| Southern Missouri vs. Commerzbank AG | Southern Missouri vs. Investar Holding Corp | Southern Missouri vs. Colony Bankcorp | Southern Missouri vs. Western New England |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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