Correlation Between Ottawa Savings and First Reliance
Can any of the company-specific risk be diversified away by investing in both Ottawa Savings and First Reliance 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 Ottawa Savings and First Reliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ottawa Savings Bancorp and First Reliance Bancshares, you can compare the effects of market volatilities on Ottawa Savings and First Reliance 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 Ottawa Savings with a short position of First Reliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ottawa Savings and First Reliance.
Diversification Opportunities for Ottawa Savings and First Reliance
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ottawa and First is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ottawa Savings Bancorp and First Reliance Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Reliance Bancshares and Ottawa Savings 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 Ottawa Savings Bancorp are associated (or correlated) with First Reliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Reliance Bancshares has no effect on the direction of Ottawa Savings i.e., Ottawa Savings and First Reliance go up and down completely randomly.
Pair Corralation between Ottawa Savings and First Reliance
Given the investment horizon of 90 days Ottawa Savings Bancorp is expected to generate 0.38 times more return on investment than First Reliance. However, Ottawa Savings Bancorp is 2.6 times less risky than First Reliance. It trades about 0.09 of its potential returns per unit of risk. First Reliance Bancshares is currently generating about 0.02 per unit of risk. If you would invest 1,252 in Ottawa Savings Bancorp on September 3, 2024 and sell it today you would earn a total of 33.00 from holding Ottawa Savings Bancorp or generate 2.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 7.88% |
| Values | Daily Returns |
Ottawa Savings Bancorp vs. First Reliance Bancshares
Performance |
| Timeline |
| Ottawa Savings Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Reliance Bancshares |
Ottawa Savings and First Reliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ottawa Savings and First Reliance
The main advantage of trading using opposite Ottawa Savings and First Reliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ottawa Savings position performs unexpectedly, First Reliance 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 Reliance will offset losses from the drop in First Reliance's long position.| Ottawa Savings vs. Lake Shore Bancorp | Ottawa Savings vs. IF Bancorp | Ottawa Savings vs. Home Federal Bancorp |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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