Correlation Between Oak Valley and LINKBANCORP
Can any of the company-specific risk be diversified away by investing in both Oak Valley and LINKBANCORP 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 Oak Valley and LINKBANCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Valley Bancorp and LINKBANCORP, you can compare the effects of market volatilities on Oak Valley and LINKBANCORP 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 Oak Valley with a short position of LINKBANCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Valley and LINKBANCORP.
Diversification Opportunities for Oak Valley and LINKBANCORP
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oak and LINKBANCORP is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Oak Valley Bancorp and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP and Oak Valley 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 Oak Valley Bancorp are associated (or correlated) with LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of Oak Valley i.e., Oak Valley and LINKBANCORP go up and down completely randomly.
Pair Corralation between Oak Valley and LINKBANCORP
Given the investment horizon of 90 days Oak Valley Bancorp is expected to under-perform the LINKBANCORP. But the stock apears to be less risky and, when comparing its historical volatility, Oak Valley Bancorp is 1.0 times less risky than LINKBANCORP. The stock trades about -0.16 of its potential returns per unit of risk. The LINKBANCORP is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 750.00 in LINKBANCORP on November 3, 2024 and sell it today you would lose (43.00) from holding LINKBANCORP or give up 5.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oak Valley Bancorp vs. LINKBANCORP
Performance |
| Timeline |
| Oak Valley Bancorp |
| LINKBANCORP |
Oak Valley and LINKBANCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Valley and LINKBANCORP
The main advantage of trading using opposite Oak Valley and LINKBANCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Valley position performs unexpectedly, LINKBANCORP 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 LINKBANCORP will offset losses from the drop in LINKBANCORP's long position.| Oak Valley vs. Home Federal Bancorp | Oak Valley vs. Lake Shore Bancorp | Oak Valley vs. Community West Bancshares | Oak Valley vs. Magyar Bancorp |
| LINKBANCORP vs. Home Federal Bancorp | LINKBANCORP vs. Lake Shore Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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