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
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oak and LINKBANCORP is 0.92. 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 is expected to generate 1.02 times less return on investment than LINKBANCORP. But when comparing it to its historical volatility, Oak Valley Bancorp is 1.13 times less risky than LINKBANCORP. It trades about 0.26 of its potential returns per unit of risk. LINKBANCORP is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 655.00 in LINKBANCORP on August 29, 2024 and sell it today you would earn a total of 92.00 from holding LINKBANCORP or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| 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. Fifth Third Bancorp | Oak Valley vs. Huntington Bancshares Incorporated | Oak Valley vs. MT Bank |
| LINKBANCORP vs. Fifth Third Bancorp | LINKBANCORP vs. Huntington Bancshares Incorporated | LINKBANCORP vs. MT Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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