Correlation Between Orrstown Financial and Cullman Bancorp
Can any of the company-specific risk be diversified away by investing in both Orrstown Financial and Cullman 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 Orrstown Financial and Cullman Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orrstown Financial Services and Cullman Bancorp, you can compare the effects of market volatilities on Orrstown Financial and Cullman 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 Orrstown Financial with a short position of Cullman Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orrstown Financial and Cullman Bancorp.
Diversification Opportunities for Orrstown Financial and Cullman Bancorp
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Orrstown and Cullman is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Orrstown Financial Services and Cullman Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullman Bancorp and Orrstown Financial 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 Orrstown Financial Services are associated (or correlated) with Cullman Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullman Bancorp has no effect on the direction of Orrstown Financial i.e., Orrstown Financial and Cullman Bancorp go up and down completely randomly.
Pair Corralation between Orrstown Financial and Cullman Bancorp
If you would invest 3,752 in Orrstown Financial Services on August 25, 2024 and sell it today you would earn a total of 297.00 from holding Orrstown Financial Services or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Orrstown Financial Services vs. Cullman Bancorp
Performance |
| Timeline |
| Orrstown Financial |
| Cullman Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Orrstown Financial and Cullman Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orrstown Financial and Cullman Bancorp
The main advantage of trading using opposite Orrstown Financial and Cullman Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orrstown Financial position performs unexpectedly, Cullman 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 Cullman Bancorp will offset losses from the drop in Cullman Bancorp's long position.| Orrstown Financial vs. Home Federal Bancorp | Orrstown Financial vs. LINKBANCORP | Orrstown Financial vs. Rhinebeck Bancorp | Orrstown Financial vs. Lake Shore Bancorp |
| Cullman Bancorp vs. Home Federal Bancorp | Cullman Bancorp vs. Lake Shore Bancorp | Cullman Bancorp vs. Community West Bancshares | Cullman Bancorp vs. Magyar 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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